<SUBMISSION>
<ACCESSION-NUMBER>0000950153-05-002555
<TYPE>PREM14A
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20051118
<FILING-DATE>20051005
<DATE-OF-FILING-DATE-CHANGE>20051005
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACTION PERFORMANCE COMPANIES INC
<CIK>0000892147
<ASSIGNED-SIC>5090
<IRS-NUMBER>860704792
<STATE-OF-INCORPORATION>AZ
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>PREM14A
<ACT>34
<FILE-NUMBER>001-11866
<FILM-NUMBER>051125784
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1480 SOUTH HOHOKAM DRIVE
<CITY>TEMPE
<STATE>AZ
<ZIP>85281
<PHONE>6023373700
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1480 SOUTH HOHOKAM DRIVE
<CITY>TEMPE
<STATE>AZ
<ZIP>85281
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>PREM14A
<SEQUENCE>1
<FILENAME>p71264prprem14a.htm
<DESCRIPTION>PREM14A
<TEXT>
<HTML>
<HEAD>
<TITLE>prem14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>UNITED STATES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SCHEDULE 14A</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROXY STATEMENT PURSUANT TO SECTION&nbsp;14(a) OF THE
SECURITIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>EXCHANGE ACT OF 1934</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Filed by the Registrant&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Filed by a Party other than the
Registrant&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Check the appropriate box:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;Preliminary
    Proxy Statement</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Confidential,
    for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Definitive Proxy
    Statement</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Definitive
    Additional Materials</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Soliciting
    Material Pursuant to &#167;240.14a-12</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ACTION PERFORMANCE COMPANIES, INC.
</DIV>

<DIV align="left" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 8pt;">
(Name of Registrant as Specified In Its Charter)
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">

</DIV>

<DIV align="left" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 8pt;">
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Payment of Filing Fee (Check the appropriate box):
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT face="wingdings">&#111;</FONT></TD>
    <TD align="left">
    No fee required.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</TD>
    <TD align="left">
    Title of each class of securities to which transaction applies:
    Common stock, par value $.01&nbsp;per share</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</TD>
    <TD align="left">
    Aggregate number of securities to which transaction applies:
    19,341,740 shares of Action Performance common stock, which
    includes (i)&nbsp;18,668,711 shares of common stock which are
    issued and outstanding, and (ii)&nbsp;673,029 shares of common
    stock issuable upon exercise of issued and outstanding warrants
    and vested options that have an exercise price less than $13.00
    per share.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</TD>
    <TD align="left">
    Per unit price or other underlying value of transaction computed
    pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on
    which the filing fee is calculated and state how it was
    determined): The filing fee of $28,935.20 was determined by
    multiplying 0.0001177 by the aggregate amount of cash to be
    transferred to security holders in the transaction.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</TD>
    <TD align="left">
    Proposed maximum aggregate value of transaction: $245,838,554</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)</TD>
    <TD align="left">
    Total fee paid: $28,935.20</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT face="wingdings">&#111;</FONT></TD>
    <TD align="left">
    Fee paid previously with preliminary materials.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 93%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT face="wingdings">&#111;</FONT></TD>
    <TD align="left">
    Check box if any part of the fee is offset as provided by
    Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for
    which the offsetting fee was paid previously. Identify the
    previous filing by registration statement number, or the Form or
    Schedule and the date of its filing.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</TD>
    <TD align="left">
    Amount Previously Paid:</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</TD>
    <TD align="left">
    Form, Schedule or Registration Statement No.:</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="12%"></TD>
    <TD width="88%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</TD>
    <TD align="left">
    Filing Party:</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 14pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 83%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>ACTION PERFORMANCE COMPANIES, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>1480&nbsp;S.&nbsp;Hohokam Drive</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>Tempe, AZ 85281</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(602)&nbsp;227-3900</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROPOSED MERGER&nbsp;&#151; YOUR VOTE IS VERY IMPORTANT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
To the Shareholders of Action Performance Companies, Inc.:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You are cordially invited to attend a special meeting of
shareholders of Action Performance Companies, Inc. (&#147;Action
Performance&#148;) to be held
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, at 8:00&nbsp;a.m., local time, at Action
Performance&#146;s corporate headquarters located at
1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;29, 2005, Action Performance entered into a
merger agreement providing for the acquisition of Action
Performance by SMISC, LLC (&#147;SMISC&#148;), a Delaware
limited liability company equally owned by International
Speedway Corporation and Speedway Motorsports, Inc. If the
merger contemplated by the merger agreement is consummated, you
will be entitled to receive $13.00 in cash, without interest,
for each share of Action Performance common stock you own. At
the special meeting, you will be asked to approve the merger
agreement, a copy of which is attached to this proxy statement
as Appendix&nbsp;A, and the transactions contemplated thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors has unanimously approved and adopted the
merger agreement and the transactions contemplated thereby,
including the merger, and has unanimously determined that the
merger agreement and such transactions are advisable and fair
to, and in the best interests of, the holders of common stock of
Action Performance. <B>The board of directors unanimously
recommends that Action Performance shareholders vote
&#147;FOR&#148; the approval of the merger agreement.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Fred W. Wagenhals, our chief executive officer,
controls the voting power over approximately 9.7% of our
outstanding shares of common stock. Mr.&nbsp;Wagenhals is a
party to a shareholder agreement, attached to this proxy
statement as Appendix&nbsp;C with SMISC requiring him to vote in
favor of the merger and against any competing proposal, except
in the event that the merger agreement is terminated in
accordance with its terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Only shareholders of record at the close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005 are entitled to notice of, and to vote at, the special
meeting or any adjournments or postponements thereof. <B>WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND RETURN
YOUR PROXY PROMPTLY.</B> If you fail to return your proxy card,
the effect will be the same as a vote against the approval of
the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying proxy statement provides you with detailed
information about the merger agreement and the proposed merger.
We urge you to read the entire proxy statement carefully. The
affirmative vote of a majority of the shares of Action
Performance common stock outstanding on the record date is
required to approve the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS VERY
IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING, PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY
CARD FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD. YOUR
COOPERATION IN VOTING YOUR SHARES WILL BE GREATLY
APPRECIATED.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Voting by proxy will not prevent you from voting your shares in
person if you subsequently choose to attend the annual meeting.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Herbert M. Baum</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Executive Chairman</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
Tempe, Arizona
</DIV>

<DIV align="left" style="font-size: 10pt;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the merger,
passed upon the merits or fairness of the merger agreement or
the transactions contemplated thereby, including the merger, or
passed upon the adequacy or accuracy of the enclosed proxy
statement. Any representation to the contrary is a criminal
offense.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The proxy statement,
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, is first being mailed to shareholders on or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005.
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>ACTION PERFORMANCE COMPANIES, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>1480&nbsp;S.&nbsp;Hohokam Drive</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>Tempe, AZ 85281</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(602)&nbsp;227-3900</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTICE OF SPECIAL MEETING OF SHAREHOLDERS</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>To Be
Held &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
TO THE SHAREHOLDERS OF ACTION PERFORMANCE COMPANIES, INC.:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notice is hereby given that a special meeting of shareholders of
Action Performance Companies, Inc., an Arizona corporation
(&#147;Action Performance&#148;), will be held
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, at 8:00&nbsp;a.m. local time, at Action Performance&#146;s
corporate headquarters located at 1480&nbsp;S.&nbsp;Hohokam
Drive, Tempe, Arizona 85281, for the following purposes:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    1.&nbsp;To consider and vote upon a proposal to approve the
    Agreement and Plan of Merger, dated as of August&nbsp;29, 2005,
    by and among International Speedway Corporation, Speedway
    Motorsports, Inc., SMISC, LLC, Motorsports Authentics, Inc. and
    Action Performance, which provides for the merger of Motorsports
    Authentics, Inc., an indirect wholly-owned subsidiary of SMISC,
    LLC, with and into Action Performance, with Action Performance
    continuing as the surviving corporation of the merger, and the
    conversion of each outstanding share of common stock of Action
    Performance into the right to receive $13.00 in cash, without
    interest (other than shares held (i)&nbsp;as treasury shares or
    by any subsidiary of Action Performance or (ii)&nbsp;by SMISC,
    LLC or Motorsports Authentics, Inc.).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    2.&nbsp;To transact such other business as may properly come
    before the special meeting and any adjournments or postponements
    of the special meeting, including, if submitted to a vote of the
    shareholders, a motion to adjourn the special meeting to another
    time or place for the purpose of soliciting additional proxies.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Only shareholders of record at the close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005 are entitled to notice of, and to vote at, the special
meeting or any adjournments or postponements thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors has unanimously approved and adopted the
merger agreement and the transactions contemplated thereby,
including the merger, and has unanimously determined that the
merger agreement and such transactions are advisable and fair
to, and in the best interests of, the holders of common stock of
Action Performance. <B>The board of directors unanimously
recommends that Action Performance shareholders vote
&#147;FOR&#148; the approval of the merger agreement.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement and the merger are described in the
accompanying proxy statement and a copy of the merger agreement
is attached to the proxy statement as Appendix&nbsp;A. We urge
you to read the entire proxy statement and the merger agreement
carefully.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We hope you will be able to attend the meeting in person and you
are cordially invited to attend. If you expect to attend the
meeting, please check the appropriate box on the proxy card when
you return your proxy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The adoption of the merger agreement requires the approval of
the holders of a majority of the outstanding shares of Action
Performance common stock entitled to vote thereon. Mr.&nbsp;Fred
W. Wagenhals, our chief executive officer, controls the voting
power over approximately 9.7% of our outstanding shares of
common stock. Mr.&nbsp;Wagenhals is a party to a shareholder
agreement with SMISC, LLC requiring him to vote in favor of the
merger and against any competing proposal, except in the event
that the merger agreement is terminated in accordance with its
terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Arizona law, shareholders of a corporation are not
entitled to exercise dissenters&#146; rights if shares of the
corporation are registered on a national securities exchange or
quoted on NASDAQ. Consequently, because shares of Action
Performance&#146;s common stock are registered on the New York
Stock Exchange, you will not be entitled to exercise
dissenters&#146; rights. See &#147;Special Factors&nbsp;&#151;
No Dissenters&#146; Rights&#148; on page&nbsp;46.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND
RETURN YOUR PROXY PROMPTLY. If your shares are held in
&#147;street name&#148; by your broker, you
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
should instruct your broker on how to vote your shares using the
instructions provided by your broker. Even if you plan to attend
the special meeting in person, we request that you complete,
sign, date and return the enclosed proxy prior to the special
meeting and thus ensure that your shares will be represented at
the special meeting if you are unable to attend. If you sign,
date and mail your proxy card without indicating how you wish to
vote, your proxy will be voted in favor of the approval of the
merger agreement. If you fail to return your proxy card, the
effect will be that your shares will not be counted for purposes
of determining whether a quorum is present at the special
meeting and will have the same effect as a vote against the
approval of the merger agreement. If you are a shareholder of
record and do attend the special meeting and wish to vote in
person, you may revoke your proxy and vote in person. It is
important that all shareholders execute, date and return the
proxy, using the enclosed envelope to which no postage need be
affixed if mailed in the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Please do not send any stock certificates to us at this time. If
the merger is consummated, you will be sent instructions
regarding surrender of your certificates.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    By Order of our Board of Directors,</TD>
</TR>

<TR>
    <TD style="font-size: 48pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    David M. Riddiford</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Chief Financial Officer, Treasurer and Secretary</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
Tempe, Arizona
</DIV>

<DIV align="left" style="font-size: 10pt;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<DIV align="left" style="font-size: 10pt;">
<!-- TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROXY STATEMENT</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#101'>SUMMARY TERM SHEET</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#102'>QUESTIONS AND ANSWERS ABOUT THE SPECIAL
    MEETING AND THE MERGER</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#103'>CAUTIONARY STATEMENT CONCERNING
    FORWARD-LOOKING INFORMATION</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#104'>PARTIES INVOLVED IN THE PROPOSED
    TRANSACTION</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#105'>THE SPECIAL MEETING</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#106'>General</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#107'>Record Date and Voting Information</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#108'>Quorum</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#109'>Required Vote</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#110'>Proxies and Revocation of Proxies</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#111'>Expenses of Proxy Solicitation</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#112'>Adjournments and Postponements</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#113'>Attending the Special Meeting</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#114'>SPECIAL FACTORS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#115'>Background of the Merger</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#116'>Reasons for the Merger; Recommendations of
    Our Board of Directors; Fairness of the Merger</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#117'>Opinion of SunTrust Robinson Humphrey</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#119'>Payment of Consideration</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#120'>Interests of Action Performance Directors
    and Executive Officers in the Merger</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#121'>Federal Regulatory Matters</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#122'>Material U.S.&nbsp;Federal Income Tax
    Consequences</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#123'>No Dissenters&#146; Rights</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#125'>TERMS OF THE MERGER AGREEMENT</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#126'>General: The Merger</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#127'>When the Merger Becomes Effective</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#128'>Consideration to be Received Pursuant to
    the Merger; Treatment of Stock Options and Warrants</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#129'>Payment for Action Performance Common Stock
    in the Merger</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#130'>Representations and Warranties</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#131'>Agreements Relating to Action
    Performance&#146;s Interim Operations</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#132'>No Solicitation of Competing Proposals</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#133'>Special Meeting of Action Performance
    Shareholders; Recommendation of Our Board of Directors</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#134'>Indemnification and Insurance of Action
    Performance Directors and Officers</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#135'>Employee Matters</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#136'>Other Agreements</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#137'>Conditions to the Merger</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#138'>Termination of the Merger Agreement</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#139'>Effects of Terminating the Merger
    Agreement</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#140'>Fees and Expenses</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#141'>Modification or Amendment of the Merger
    Agreement</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">i

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guaranty by ISC and SMI</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholder Agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#142'>MARKET PRICE OF ACTION PERFORMANCE&#146;S
    COMMON STOCK</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#143'>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#144'>FUTURE SHAREHOLDER PROPOSALS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#145'>WHERE SHAREHOLDERS CAN FIND MORE
    INFORMATION</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#146'>Appendix A&nbsp;Agreement and Plan of
    Merger, dated as of August&nbsp;29, 2005, by and among
    International Speedway Corporation, Speedway Motorsports, Inc.,
    SMISC, LLC, Motorsports Authentics, Inc. and Action Performance
    Companies, Inc.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appendix B&nbsp;Opinion of SunTrust Robinson Humphrey, dated
    August&nbsp;28, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appendix C&nbsp;Shareholder Agreement, dated as of
    August&nbsp;29, 2005, among SMISC, LLC and Fred&nbsp;W. Wagenhals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt;">ii

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='101'></A>
</DIV>

<!-- link1 "SUMMARY TERM SHEET" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SUMMARY TERM SHEET</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This summary term sheet highlights selected information
contained in this proxy statement and might not contain all of
the information that is important to you. You are urged to read
this proxy statement carefully, including the appendices and the
documents referred to in this proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In this proxy statement, the terms &#147;we,&#148;
&#147;us,&#148; &#147;our,&#148; &#147;Action Performance&#148;
and the &#147;Company&#148; refer to Action Performance
Companies, Inc. and, where appropriate, its subsidiaries. In
this proxy statement, we refer to International Speedway
Corporation as &#147;ISC,&#148; Speedway Motorsports, Inc. as
&#147;SMI,&#148; SMISC, LLC as &#147;SMISC&#148; and Motorsports
Authentics, Inc. as &#147;Motorsports Authentics.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Parties Involved in the Proposed Transaction
(Page&nbsp;14)</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance is the leader in the design, promotion,
    marketing and distribution of licensed motorsports merchandise.
    Our products include a broad range of motorsports-related
    die-cast replica collectibles, apparel, souvenirs and other
    sports-inspired memorabilia. Action Performance markets and
    distributes products through a variety of channels including the
    Action Racing Collectables network of wholesale distributors and
    dealers, the Racing Collectables Club of America, QVC,
    goracing.com, trackside at racing events, direct corporate
    promotions, mass retail and department stores, specialty dealers
    and select online retailers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    ISC is a leading promoter of motorsports activities in the
    United States, currently promoting more than 100 racing events
    annually as well as numerous other motorsports-related
    activities. ISC owns and/or operates 11 of the nation&#146;s
    major motorsports entertainment facilities. ISC also owns and
    operates the Motor Racing Network, Inc. radio network, or MRN
    Radio, the nation&#146;s largest independent sports radio
    network in terms of event programming; DAYTONA USA&nbsp;&#151;
    the Ultimate Motorsports Attraction, a motorsports-themed
    entertainment complex and the Official Attraction of NASCAR; and
    subsidiaries which provide catering services, food and beverage
    concessions, and produce and market motorsports-related
    merchandise under the trade name &#147;Americrown.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMI is a leading marketer and promoter of motorsports
    entertainment in the United States. SMI owns and operates six of
    the nation&#146;s premier motorsports facilities. SMI provides
    souvenir merchandising services through its SMI Properties
    subsidiaries, and manufactures and distributes smaller-scale,
    modified racing cars through its 600 Racing subsidiary. SMI also
    owns Performance Racing Network, which broadcasts syndicated
    motorsports programming to over 710 radio stations nationwide.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC is a Delaware limited liability company that is equally
    owned by ISC and SMI. SMISC does business through its
    subsidiaries, which engage in the business of designing,
    marketing and distributing licensed motorsports merchandise.
    SMISC may assign its rights and obligations under the merger
    agreement to an affiliate so long as it remains liable for its
    obligations under the merger agreement if such affiliate does
    not perform its obligations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Motorsports Authentics, Inc. is a newly-formed Arizona
    corporation and an indirect wholly-owned subsidiary of SMISC.
    SMISC formed Motorsports Authentics for the sole purpose of
    entering into the merger agreement and consummating the
    transactions contemplated by the merger agreement. Motorsports
    Authentics has not engaged in any business except in
    anticipation of the merger. Motorsports Authentics may assign
    its rights and obligations under the merger agreement to an
    affiliate so long as it remains liable for its obligations under
    the merger agreement if such affiliate does not perform its
    obligations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Action Performance Will Hold a Special Meeting of Its
Shareholders to Approve the Merger Agreement (Page&nbsp;16)</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Time, Place and Date (Page&nbsp;16)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The special meeting will be held
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, at 8:00&nbsp;a.m., local time, at Action
Performance&#146;s corporate headquarters located at
1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281.
</DIV>

<P align="center" style="font-size: 10pt;">

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Purpose (Page&nbsp;16)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the special meeting, you will be asked to consider and vote
upon the proposal to approve the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Record Date and Voting (Page&nbsp;16)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Only shareholders who hold shares of Action Performance common
stock at the close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, the record date for the special meeting, will be entitled
to vote at the special meeting. Each share of Action Performance
common stock outstanding on the record date will be entitled to
one vote on each matter submitted to shareholders for approval
at the special meeting. As of the record date, there
were &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Action Performance common stock outstanding and entitled to
vote at the special meeting.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Vote Required (Page&nbsp;17)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Approval of the merger agreement requires the affirmative vote
of a majority of the shares of Action Performance common stock
outstanding on the record date. Mr.&nbsp;Fred W. Wagenhals, our
chief executive officer, controls the voting power over
approximately 9.7% of our outstanding shares of common stock.
Mr.&nbsp;Wagenhals is a party to a shareholder agreement with
SMISC requiring him to vote in favor of the merger and against
any competing proposal, except in the event that the merger
agreement is terminated in accordance with its terms.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Proxies and Revocation of Proxies (Page&nbsp;17)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any Action Performance shareholder of record entitled to vote
may submit a proxy by returning the enclosed proxy by mail or
may vote in person by appearing at the special meeting. If your
shares are held in &#147;street name&#148; by your broker, you
should instruct your broker on how to vote your shares using the
instructions provided by your broker. Any person giving a proxy
has the power to revoke and change it at any time before it is
voted. It may be revoked and changed by filing a written notice
of revocation with the Secretary of Action Performance at Action
Performance&#146;s executive offices located at
1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281, by
submitting in writing a proxy bearing a later date, or by
attending the special meeting and voting in person. Attendance
at the special meeting will not, by itself, revoke a proxy. If
you have given voting instructions to a broker or other nominee
that holds your shares in &#147;street name,&#148; you may
revoke those instructions by following the directions given by
the broker or other nominee.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>When the Merger will be Consummated (Page&nbsp;47)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are working to consummate the merger as soon as possible. We
anticipate consummating the merger during our first fiscal
quarter ending December&nbsp;31, 2005, subject to the approval
and adoption of the merger agreement by Action
Performance&#146;s shareholders and the satisfaction of the
other closing conditions.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Share Ownership of Directors and Executive Officers
    (Page&nbsp;71)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, the record date for the special meeting, the directors and
executive officers of Action Performance held and are entitled
to vote, in the
aggregate, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Action Performance common stock, representing
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the outstanding
shares of Action Performance common stock. Each of our directors
and executive officers have informed Action Performance that
they intend to vote all of their shares of Action Performance
common stock <B>&#147;FOR&#148; </B>the approval of the merger
agreement. In addition, Mr.&nbsp;Fred W. Wagenhals, our chief
executive officer, controls the voting power over approximately
9.7% of our outstanding shares of common stock.
Mr.&nbsp;Wagenhals is a party to a shareholder agreement with
SMISC requiring him to vote in favor of the merger and against
any competing proposal, except in the event that the merger
agreement is terminated in accordance with its terms.
</DIV>

<P align="center" style="font-size: 10pt;">2

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Action Performance Shareholders Will Receive $13.00 in Cash,
Without Interest, For Each Share of Action Performance Common
Stock They Own (Page&nbsp;48)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon the consummation of the merger, each issued and outstanding
share of Action Performance common stock will be converted into
the right to receive $13.00 in cash, without interest (other
than shares held (i)&nbsp;as treasury shares or by any
subsidiary of Action Performance or (ii)&nbsp;by SMISC,
Motorsports Authentics or any subsidiary of Motorsports
Authentics).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>How Outstanding Options and Warrants Will Be Treated
(Page&nbsp;42)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All options and warrants to acquire shares of Action Performance
common stock outstanding immediately prior to the effective time
of the merger will become fully vested and exercisable (whether
or not then vested or subject to any performance condition that
has not been satisfied). At the effective time of the merger,
any options and warrants not exercised will be canceled as of
the effective time of the merger, and the holders thereof will
be entitled to receive a cash payment equal to $13.00 multiplied
by the number of shares subject to the options or warrants, less
the aggregate exercise prices of the options or warrants and
less applicable taxes required to be withheld. Any options or
warrants with an exercise price greater than $13.00&nbsp;per
share will be canceled without the right to receive any cash
payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Recommendations of the Board of Directors; Fairness of the
Merger (Page&nbsp;28)</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Board of Directors (Page&nbsp;28)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors has (i)&nbsp;unanimously determined that
the merger agreement and the transactions contemplated thereby,
including the merger, are advisable and fair to, and in the best
interests of, the holders of Action Performance common stock,
(ii)&nbsp;unanimously approved and adopted the merger agreement
and the transactions contemplated thereby, including the merger,
and (iii)&nbsp;unanimously recommends that you vote
<B>&#147;FOR&#148; </B>the approval of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors reached this determination based on the
opinion of SunTrust Robinson Humphrey, its financial advisor,
and such other factors, documentation and information deemed
appropriate by the board of directors.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fairness Opinion of SunTrust Robinson Humphrey
    (Page&nbsp;32)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors engaged SunTrust Robinson Humphrey to act
as its financial advisor in connection with the proposed merger
and to render an opinion as to whether the consideration to be
received by holders of shares of Action Performance common stock
pursuant to the merger agreement is fair, from a financial point
of view, to such holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The full text of the opinion, attached hereto as
Appendix&nbsp;B, should be read for a description of the
assumptions made, the matters considered and the limitations on
the review undertaken.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey provided its opinion for the
information and assistance of the board of directors in
connection with their consideration of the merger. SunTrust
Robinson Humphrey&#146;s opinion is not a recommendation as to
how any Action Performance shareholder should vote with respect
to the merger agreement. Action Performance agreed to pay
SunTrust Robinson Humphrey a fee for these services, the
principal portion of which is payable upon consummation of the
merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Directors and Executive Officers Have Interests in the
Transaction that May Be Different From, or In Addition To,
Interests of Action Performance Shareholders Generally
(Page&nbsp;42)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In considering the recommendations of our board of directors,
you should be aware that some executive officers and directors
of Action Performance have interests in the merger that are
different from your interests as a shareholder and that may
present actual or potential conflicts of interest. These
interests are described in
</DIV>

<P align="center" style="font-size: 10pt;">3

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<DIV align="left" style="font-size: 10pt;">
more detail under &#147;Special Factors&nbsp;&#151; Interests of
Action Performance Directors and Executive Officers in the
Merger&#148; beginning on page&nbsp;42, and include the
following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the merger will constitute a &#147;change of control&#148; for
    purposes of the change of control provisions in the employment
    and/or change of control agreements with certain of our
    executive officers, and will result in a change of position or
    duties with respect to such executive officers. Accordingly,
    such executive officers will be entitled to receive severance
    payments under such agreements in the event such executive
    officers resign or are terminated in connection with the
    consummation of the merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    option awards previously granted to our executive officers and
    directors will vest in full and become exercisable immediately
    prior to the consummation of the merger, whether or not then
    vested or subject to any performance condition that has not been
    satisfied;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the merger agreement provides for indemnification arrangements
    for each of our current and former directors and officers that
    will continue following the effective time of the merger, as
    well as insurance coverage that will continue for six years
    following the effective time of the merger covering his or her
    service with Action Performance as a director or officer.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors was aware of these interests and
considered them, among other matters, in approving and adopting
the merger agreement and the transactions contemplated thereby,
including the merger, and in determining to recommend that
Action Performance shareholders vote <B>&#147;FOR&#148; </B>the
approval of the merger agreement. You should consider these and
other interests of our directors and executive officers that are
described in this proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Payment of the Merger Consideration (Page&nbsp;41)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the merger agreement, SMISC represented and warranted to
Action Performance that it had sufficient cash on hand, or
commitments from ISC and SMI, to pay the aggregate merger
consideration payable to holders of Action Performance common
stock, options and warrants. In addition, ISC and SMI have
severally (but not jointly) guaranteed all obligations of SMISC
and Motorsports Authentics through the closing date under the
merger agreement, including the obligation to pay such
consideration. Accordingly, the consummation of the transactions
contemplated by the merger agreement are not contingent upon
SMISC&#146;s receipt of third party financing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>A Number of Conditions Must Be Satisfied or Waived to
Consummate the Merger (Page&nbsp;61)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The obligations of the parties to consummate the merger are
subject to various standard conditions, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the approval of the merger agreement by holders of a majority of
    the shares of Action Performance common stock outstanding on the
    record date;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the expiration or termination of the waiting period applicable
    to the consummation of the merger under the Hart-Scott-Rodino
    Antitrust&nbsp;Improvements Act of 1976, as amended (the
    &#147;HSR Act&#148;);</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the obligations of SMISC and Motorsports Authentics
to consummate the merger are subject to various other
conditions, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the absence of any pending or, to Action Performance&#146;s
    knowledge, overt, written and credible threat of any suit,
    action or proceeding by any governmental authority or other
    person having a reasonable likelihood of success challenging the
    merger agreement or the transactions contemplated thereby,
    seeking to restrain or prohibit the merger, seeking to place
    limitations on the ownership of Action Performance and its
    subsidiaries by SMISC, seeking damages that are material in
    relation to Action Performance, seeking to prohibit or
    materially limit the ownership or operation by the parties of
    any portion of the business or assets of Action Performance,
    seeking to compel the parties to divest or hold separate any
    portion of the business or assets of Action Performance as a
    result of the merger, or seeking to prohibit SMISC and its
    affiliates from controlling in any material respect the business
    or operations of Action Performance or its subsidiaries;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">4

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the delivery by Action Performance of its audited financial
    statements for its fiscal year ended September&nbsp;30, 2005,
    including an unqualified opinion of its independent auditors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the delivery by Action Performance of a written representation
    to SMISC setting forth any and all deficiencies, significant
    deficiencies, and/or material weaknesses noted in Action
    Performance&#146;s compliance efforts with Section&nbsp;404 of
    the Sarbanes-Oxley Act of 2002, as amended to date, and a
    separate written description of remediation and/or proposed
    remediation plans for such deficiencies, significant
    deficiencies, and/or material weaknesses, and the remediation or
    proposed remediation plan with respect to any identified
    material weakness must reasonably be expected to prevent a
    material adverse effect;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the receipt by Action Performance of consents to the transaction
    from certain specified drivers, driver teams and automobile
    manufacturers whose contracts with Action Performance give them
    consent rights in connection with the merger; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    no material adverse effect shall have occurred with respect to
    Action Performance since the date of the merger agreement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See &#147;Terms of the Merger Agreement&nbsp;&#151; Conditions
to the Merger&#148; beginning on page&nbsp;61 for a further
discussion of the conditions to closing set forth in the merger
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Limitations on Solicitation of Competing Proposals
(Page&nbsp;54)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have agreed not to solicit from third parties or enter into
discussions or negotiations regarding a proposal for an
alternative transaction while the merger is pending, and our
board of directors may not (i)&nbsp;withdraw or modify its
recommendation of the merger in a manner adverse to SMISC,
(ii)&nbsp;approve or recommend an alternative transaction, or
(iii)&nbsp;enter into an agreement relating to a proposal for an
alternative transaction, in each case, except in the
circumstances specified in the merger agreement. See &#147;Terms
of the Merger Agreement&nbsp;&#151; No Solicitation of Competing
Proposals&#148; beginning on page&nbsp;54.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>How the Merger Agreement May Be Terminated (Page&nbsp;62)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC, Motorsports Authentics and Action Performance may
mutually agree to terminate the merger agreement at any time
upon the approval of their respective boards of directors or
managers. With certain exceptions, SMISC or Action Performance
may also terminate the merger agreement at any time if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the merger has not been consummated on or before
    December&nbsp;31, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a court or any governmental entity issues a nonappealable final
    order, injunction or ruling that prevents the consummation of
    the merger or otherwise has a material adverse effect;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the approval of Action Performance&#146;s shareholders is not
    obtained.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC may also terminate the merger agreement at any time if,
with certain exceptions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance has breached or failed to perform any of its
    representations, warranties, covenants or agreements contained
    in the merger agreement that would give rise to a failure of a
    closing condition (See &#147;Conditions to Merger&#148;
    beginning on page&nbsp;61) and which is incapable of being
    cured, or has not been cured (if capable of being cured) by
    December&nbsp;31, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a court or any governmental entity has issued a final and
    nonappealable order, decree or ruling or taken any other action,
    or there shall be in effect any statute, law, rule, legal
    restraint or prohibition, in either case (a)&nbsp;challenging,
    restraining or prohibiting the merger, or placing limitations on
    the ownership of shares of Action Performance common stock (or
    shares of common stock of the surviving corporation) by SMISC or
    Motorsports Authentics, or imposing upon Action Performance any
    damages that are material in relation to Action Performance,
    (b)&nbsp;prohibiting or materially limiting the ownership or
    operation by Action Performance, SMISC or any of their
    subsidiaries of any portion of any business or any assets of
    Action Performance, SMISC or any of their respective
    subsidiaries, or compelling Action Performance, SMISC or any of
    their respective subsidiaries to divest or hold separate any
    portion of</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">5

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    any business or of any assets of Action Performance, SMISC or
    any of their respective subsidiaries, or (c)&nbsp;prohibiting
    SMISC or any of its subsidiaries from effectively controlling in
    any material respect the business or operations of Action
    Performance or any of its subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our board of directors (a)&nbsp;withdraws or modifies in a
    manner adverse to SMISC its recommendation of the merger
    agreement and the merger, (b)&nbsp;recommends any alternative
    transaction, (c)&nbsp;fails publicly to reaffirm its
    recommendation of the merger agreement and the merger within
    five business days of receipt of a written request by SMISC to
    provide such reaffirmation following the receipt by Action
    Performance of a proposal for an alternative transaction, or
    (d)&nbsp;notifies SMISC it has received a superior proposal and
    that a majority of the disinterested directors of Action
    Performance have determined in good faith, after consultation
    with outside counsel, that the failure to withdraw or modify its
    recommendation of the merger agreement and the merger would
    violate the board of director&#146;s fiduciary duties to Action
    Performance&#146;s shareholders under applicable law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC determines that any litigation costs it would be required
    to bear in connection with resolving any objections and
    challenges asserted by any governmental entity or third party
    with respect to the transactions contemplated by the merger
    agreement under the HSR Act or any other antitrust or unfair
    competition law, rule or regulation are reasonably likely to
    exceed $1.0&nbsp;million, or SMISC determines in good faith
    (after consultation with outside counsel) that SMISC, Action
    Performance or one of their affiliates will be required to
    proffer, divest or hold separate any material assets or any
    material portion of any business of SMISC, Action Performance or
    any of their affiliates in connection with resolving any such
    objection or challenge;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance fails to deliver its audited financial
    statements for its fiscal year ended September&nbsp;30, 2005,
    including an unqualified opinion of Action Performance&#146;s
    independent auditors as to its financial statements, or its
    written representation concerning deficiencies, significant
    deficiencies and/or material weaknesses (and the proposed
    remediation plans), to SMISC by December&nbsp;31, 2005;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount required to obtain the consents of the specified
    drivers, driver teams and automobile manufacturers described
    above exceeds, in the aggregate, $1.0&nbsp;million (exclusive of
    any expenses, settlement amounts, or damages arising out of
    litigation relating to this transaction).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance may also terminate the merger agreement at
any time if, with certain exceptions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC or Motorsports Authentics has breached or failed to
    perform any of their representations, warranties, covenants or
    agreements contained in the merger agreement that would give
    rise to a failure of a closing condition and which is incapable
    of being cured, or has not been cured (if capable of being
    cured) by December&nbsp;31, 2005;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our board of directors accepts a superior proposal prior to the
    approval of the merger agreement by the shareholders of Action
    Performance, subject to various requirements and conditions
    described under &#147;Terms of the Merger Agreement&nbsp;&#151;
    No Solicitation of Competing Proposals&#148; and &#147;Special
    Meeting of Action Performance Shareholders; Recommendation of
    Our Board of Directors.&#148;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See &#147;Terms of the Merger Agreement&nbsp;&#151; Termination
of the Merger Agreement&#148; beginning on page&nbsp;62.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Termination Fees and Expenses May Be Payable in Some
Circumstances (Page&nbsp;65)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In specified circumstances, if the merger agreement is
terminated before the effective time of the merger, we must
reimburse SMISC for its documented out-of-pocket expenses up to
a maximum of $1.55&nbsp;million and pay SMISC a termination fee
of $7.0&nbsp;million. In addition, in specified circumstances,
if the merger agreement is terminated before the effective time
of the merger, SMISC must reimburse Action Performance for its
documented out-of-pocket expenses up to a maximum of
$1.55&nbsp;million. See &#147;Terms of the Merger
Agreement&nbsp;&#151; Effects of Terminating the Merger
Agreement&#148; beginning on page&nbsp;65.
</DIV>

<P align="center" style="font-size: 10pt;">6
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Procedures for Receiving Merger Consideration
(Page&nbsp;48)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As soon as practicable after the effective time of the merger, a
paying agent will mail a letter of transmittal and instructions
to you and the other Action Performance shareholders. The letter
of transmittal and instructions will tell you how to surrender
your stock certificates in exchange for the merger
consideration. <B>You should not return your stock certificates
with the enclosed proxy card, and you should not forward your
stock certificates to the paying agent without a letter of
transmittal.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Tax Considerations For Action Performance Shareholders
(Page&nbsp;44)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, the merger will be a taxable transaction to
U.S.&nbsp;holders of our common stock for U.S.&nbsp;federal
income tax purposes. A U.S.&nbsp;holder of Action Performance
common stock receiving cash in the merger in exchange for the
holder&#146;s shares of Action Performance common stock
generally will recognize gain or loss for U.S.&nbsp;federal
income tax purposes in an amount equal to the difference, if
any, between the amount of cash received in the merger and the
holder&#146;s adjusted tax basis in the Action Performance
common stock surrendered. See &#147;Special Factors&nbsp;&#151;
Material U.S.&nbsp;Federal Income Tax Consequences&#148;
beginning on page&nbsp;44. Non-U.S.&nbsp;holders of our common
stock should consult their own tax advisors for a full
understanding of the tax consequences of the merger to them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance shareholders should be aware that the tax
consequences to them of the merger may depend upon their own
situations. In addition, Action Performance shareholders may be
subject to state, local or foreign tax laws that are not
discussed in this proxy statement. <B>Action Performance
shareholders should consult their own tax advisors for a full
understanding of the tax consequences of the merger to them.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Market Price of Action Performance Stock (Page&nbsp;70)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our common stock is listed on the New York Stock Exchange, which
we refer to as &#147;NYSE&#148; in this proxy statement, under
the trading symbol &#147;ATN.&#148; On August&nbsp;29, 2005,
which was the last trading day before we announced the merger,
Action Performance&#146;s common stock closed at $11.99&nbsp;per
share. On July&nbsp;29, 2005, June&nbsp;30, 2005 and
May&nbsp;27, 2005, which were the trading days
approximately&nbsp;30, 60 and 90&nbsp;days prior to our
announcement of the merger, Action Performance&#146;s common
stock closed at $8.55, $8.82 and $9.12, respectively.
On &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, which was the last trading day before this proxy statement
was printed, Action Performance&#146;s common stock closed at
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Action Performance Shareholders Will Not Have
Dissenters&#146; Rights (Page&nbsp;46)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Arizona law, shareholders of a corporation are not
entitled to exercise dissenters&#146; rights if shares of the
corporation are registered on a national securities exchange or
quoted on NASDAQ. Consequently, because shares of Action
Performance&#146;s common stock are registered on the NYSE, you
will not have the right to exercise dissenters&#146; rights.
</DIV>

<P align="center" style="font-size: 10pt;">7

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<DIV align="left" style="font-size: 10pt;">
<A name='102'></A>
</DIV>

<!-- link1 "QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE
MERGER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following discussion briefly addresses some questions you
may have regarding the special meeting and the proposed merger.
This discussion may not address all questions that may be
important to you as a shareholder of Action Performance. Please
refer to the more detailed information contained elsewhere in
this proxy statement, including the appendices to this proxy
statement and the documents referred to in this proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>The Special Meeting</I></B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>Why am I receiving these materials?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    You are receiving this proxy statement and proxy card because
    you own shares of common stock, par value $0.01&nbsp;per share,
    of Action Performance. Our board of directors is providing these
    proxy materials to give you information for use in determining
    how to vote in connection with the special meeting of
    shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>When and where is the special meeting?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    The special meeting of shareholders will be held
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2005, at 8:00&nbsp;a.m., local time, at Action
    Performance&#146;s corporate headquarters located at
    1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>On what am I being asked to vote?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    You are being asked to consider and vote upon a proposal to
    approve a merger agreement which provides for the merger of
    Motorsports Authentics with and into Action Performance, with
    Action Performance continuing as the surviving corporation of
    the merger, and the conversion of each outstanding share of
    common stock of Action Performance into the right to receive
    $13.00 in cash, without interest (other than shares held
    (i)&nbsp;as treasury shares or by any subsidiary of Action
    Performance or (ii)&nbsp;by SMISC, Motorsports Authentics or any
    subsidiary of Motorsports Authentics).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>Who is entitled to vote?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    Only shareholders who hold shares of Action Performance common
    stock at the close of business
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2005, the record date for the special meeting, will be entitled
    to vote at the special meeting.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What vote is required to approve the merger agreement?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    For the merger agreement to be approved, shareholders holding a
    majority of the shares of Action Performance common stock
    outstanding on the record date must vote <B>&#147;FOR&#148;
    </B>the approval of the merger agreement. Mr.&nbsp;Fred W.
    Wagenhals, our chief executive officer, controls the voting
    power over approximately 9.7% of our outstanding shares of
    common stock. Mr.&nbsp;Wagenhals is a party to a shareholder
    agreement with SMISC requiring him to vote in favor of the
    merger and against any competing proposal, except in the event
    that the merger agreement is terminated in accordance with its
    terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>How does the Action Performance board of directors recommend
    that I vote on the merger agreement?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    The board of directors has unanimously approved and adopted the
    merger agreement and the transactions contemplated thereby,
    including the merger, and has unanimously determined that the
    merger agreement and such transactions are advisable and fair
    to, and in the best interests of, the holders of common stock of
    Action Performance. <B>The board of directors unanimously
    recommends that Action Performance shareholders vote
    &#147;FOR&#148; the approval of the merger agreement.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>How do I vote my shares of Action Performance common
    stock?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    Before you vote, you should carefully read and consider the
    information contained in or referred to in this proxy statement,
    including the appendices. You should also determine whether you
    hold your shares of Action Performance common stock directly in
    your name as a registered shareholder or through a broker or
    other nominee because this will determine the procedure that you
    must follow in order to vote. If you</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">8

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    are a registered holder of Action Performance common stock (that
    is, if you hold your Action Performance common stock in
    certificate form), you may vote in one of the following ways:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in person at the special meeting&nbsp;&#151; complete and sign
    the enclosed proxy card and bring it to the special meeting as
    evidence of your stock ownership;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    by mail&nbsp;&#151; complete, sign and date the enclosed proxy
    card and return it to Action Performance in the enclosed postage
    paid return envelope as soon as possible.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    If you are a non-registered holder of shares of common stock of
    Action Performance (which, for purposes of this proxy statement,
    means that your shares are held in &#147;street name&#148;), you
    should instruct your broker or other nominee to vote your shares
    by following the instructions provided by your broker or other
    nominee. You may vote in person at the special meeting if you
    obtain written authorization in your name from your broker or
    other nominee and bring evidence of your stock ownership from
    your broker or other nominee.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What happens if I return my proxy card but I do not indicate
    how to vote?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    If you properly return your proxy card but do not include
    instructions on how to vote, your shares of Action Performance
    common stock will be voted <B>&#147;FOR&#148; </B>the approval
    of the merger agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What happens if I abstain from voting on a proposal?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    If you return your proxy card with instructions to abstain from
    voting on the merger agreement proposal, your shares will be
    counted in determining whether a quorum is present at the
    special meeting. An abstention with respect to the merger
    agreement proposal has the legal effect of a vote
    <B>&#147;AGAINST&#148; </B>the proposal.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What happens if I do not return a proxy card or otherwise do
    not vote?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    Your failure to return a proxy card or otherwise vote will mean
    that your shares will not be counted in determining whether a
    quorum is present at the special meeting and will have the legal
    effect of a vote <B>&#147;AGAINST&#148; </B>the proposal to
    approve the merger agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>May I revoke or change my vote after I have mailed my signed
    proxy card or otherwise submitted my vote?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    Yes. You can change your vote at any time before your shares are
    voted at the special meeting. If you are a registered holder of
    Action Performance common stock, you can do this in any of the
    following ways:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    &#149;&nbsp;by sending a written notice to the Secretary of
    Action Performance to the address specified below stating that
    you would like to revoke your proxy;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    &#149;&nbsp;by completing and submitting a new, later-dated
    proxy card by mail to the address specified below;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    &#149;&nbsp;by attending the special meeting and voting in
    person. Your attendance at the special meeting alone will not
    revoke your proxy. You must also vote at the special meeting in
    order to revoke your previously submitted proxy.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    You should send any notice of revocation or your completed new,
    later-dated proxy card, as the case may be, to Action
    Performance at the following address: 1480&nbsp;S.&nbsp;Hohokam
    Drive, Tempe, Arizona 85281, Attn: David M. Riddiford.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    If your shares are held in &#147;street name,&#148; you must
    contact your broker or other nominee and follow the directions
    provided to you in order to change your vote.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>If my broker or other nominee holds my shares in &#147;street
    name,&#148; will my broker or other nominee vote my shares for
    me?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    Your broker or other nominee will not be able to vote your
    shares of Action Performance common stock unless you have
    properly instructed your broker or other nominee on how to vote.
    If you do not provide your broker or other nominee with voting
    instructions, your shares may be considered present at the</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">9

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    special meeting for purposes of determining a quorum, but will
    have the legal effect of a vote <B>&#147;AGAINST&#148; </B>the
    proposal to approve the merger agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What does it mean if I receive more than one set of
    materials?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    This means you own shares of Action Performance common stock
    that are registered under different names. For example, you may
    own some shares directly as a shareholder of record and other
    shares through a broker or you may own shares through more than
    one broker. In these situations, you will receive multiple sets
    of proxy materials. You must complete, sign, date and return all
    of the proxy cards that you receive in order to vote all of the
    shares you own. Each proxy card you receive comes with its own
    prepaid return envelope; if you vote by mail, make sure you
    return each proxy card in the return envelope that accompanies
    that proxy card.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>The Merger</I></B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What is the proposed transaction?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    The proposed transaction is an acquisition of Action Performance
    by SMISC, a Delaware limited liability company equally owned by
    ISC and SMI. The acquisition will be effected by the merger of
    Motorsports Authentics, an indirect, wholly-owned subsidiary of
    SMISC, with and into Action Performance, with Action Performance
    continuing as the surviving corporation of the merger.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What will I receive in the merger?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    If the merger is consummated, you will be entitled to receive
    $13.00 in cash, without interest, for each share of Action
    Performance common stock owned by you at the effective time of
    the merger.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>How will the merger affect options and warrants to acquire
    Action Performance common stock?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    All options and warrants to acquire shares of Action Performance
    common stock outstanding immediately prior to the effective time
    of the merger will become fully vested and exercisable (whether
    or not then vested or subject to any performance condition that
    has not been satisfied) at the effective time of the merger. At
    the effective time of the merger, any option or warrant not
    exercised will be canceled as of the effective time of the
    merger, and the holder thereof will be entitled to receive a
    cash payment equal to $13.00 multiplied by the total number of
    shares subject to the options or warrants, less the aggregate
    exercise prices of the options or warrants and less applicable
    taxes required to be withheld. Any options or warrants with an
    exercise price equal to or greater than $13.00&nbsp;per share
    will be canceled without the right to receive any cash payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>Why is the Action Performance board of directors recommending
    the approval of the merger agreement?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    The Action Performance board of directors determined that the
    merger agreement and the transactions contemplated thereby,
    including the merger, are advisable and fair to, and in the best
    interests of, holders of shares of Action Performance&#146;s
    common stock. The board of directors reached this determination
    based on the opinion of SunTrust Robinson Humphrey, its
    financial adviser, and such other factors, documentation and
    information deemed appropriate by the board of directors. See
    &#147;Special Factors&nbsp;&#151; The Action Performance Board
    of Directors&#148; beginning on page&nbsp;28.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>What are the consequences of the merger to our executive
    officers and our board of directors?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    Like all other shareholders, upon consummation of the merger,
    our executive officers and members of our board of directors
    will be entitled to receive $13.00&nbsp;per share in cash for
    each of their shares of Action Performance common stock. In
    addition, like options to acquire shares of Action Performance
    common stock held by other option holders, options to acquire
    shares of Action Performance common stock held by our executive
    officers and directors and outstanding immediately prior to the
    effective time of the merger will become fully vested and
    exercisable (whether or not then vested or subject to any
    performance condition that has not been satisfied) at the
    effective time of the merger. Any unexercised options will be
    canceled as of the effective time of the merger. The holders of
    such options will thereafter be entitled to receive a cash
    payment equal to $13.00 multiplied by the total number of shares
    subject to</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">10

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    the options, less the aggregate exercise prices of the options
    and less applicable taxes required to be withheld. Any options
    with an exercise price equal to or greater than $13.00&nbsp;per
    share will be canceled without the right to receive any cash
    payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    In addition, as discussed in more detail under &#147;Special
    Factors&nbsp;&#151; Interests of Action Performance Directors
    and Executive Officers in the Merger&#148; beginning on
    page&nbsp;42, the merger will constitute a &#147;change of
    control&#148; for purposes of the change of control provisions
    in the employment or change of control agreements with certain
    of our executive officers, and will result in a change of
    position or duties with respect to such executive officers.
    Accordingly, such executive officers will be entitled to receive
    severance payments under such agreements in the event such
    executive officers resign or are terminated in connection with
    the consummation of the merger, unless a particular executive
    officer enters into an agreement with the surviving corporation
    providing for different treatment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    In addition, the merger agreement provides for indemnification
    arrangements for each of our current and former directors and
    officers that will continue following the effective time of the
    merger, as well as insurance coverage that will continue for six
    years following the effective time of the merger covering his or
    her service with Action Performance as a director or officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>If the merger is consummated, how will I receive the cash for
    my shares?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    If the merger is consummated, you will receive a letter of
    transmittal with instructions on how to send your stock
    certificates to the bank or trust company designated to act as
    paying agent in connection with the merger. You will receive
    cash for your shares from the paying agent after you comply with
    these instructions. If your shares of Action Performance common
    stock are held for you in &#147;street name&#148; by your
    broker, you will receive instructions from your broker as to how
    to affect the surrender of your &#147;street name&#148; shares
    and receive cash for such shares.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>Should I send in my stock certificates now?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    No.&nbsp;Soon after the merger is consummated, you will receive
    the letter of transmittal instructing you to send your stock
    certificates to the paying agent in order to receive the cash
    payment of $13.00, without interest, for each share of Action
    Performance common stock represented by the stock certificates.
    You should use the letter of transmittal to exchange your stock
    certificates for the cash payment to which you are entitled upon
    consummation of the merger.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>Are dissenters&#146; rights available?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    No.&nbsp;Under Arizona law, shareholders of a corporation are
    not entitled to exercise dissenters&#146; rights if shares of
    the corporation are registered on a national securities exchange
    or quoted on NASDAQ. Consequently, because shares of Action
    Performance&#146;s common stock are registered on the NYSE, you
    will not be entitled to exercise dissenters&#146; rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q:</B></TD>
    <TD></TD>
    <TD valign="top">
    <B>Who can help answer my questions?</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    A:</TD>
    <TD></TD>
    <TD valign="top">
    If you would like additional copies, without charge, of this
    proxy statement or if you have questions about the merger
    agreement or the merger, including the procedures for voting
    your shares, you should contact David M. Riddiford, our Chief
    Financial Officer, at (602)&nbsp;337-3700. You may also contact
    Georgeson Shareholder Communications Inc., our proxy solicitor,
    toll-free at (877)&nbsp;651-8856 with any questions.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">11
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<DIV align="left" style="font-size: 10pt;">
<A name='103'></A>
</DIV>

<!-- link1 "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any statements in this proxy statement about future results of
operations, expectations, plans and prospects, including
statements regarding consummation of the proposed merger,
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements also include those preceded or
followed by the words &#147;anticipates,&#148;
&#147;believes,&#148; &#147;could,&#148; &#147;estimates,&#148;
&#147;expects,&#148; &#147;intends,&#148; &#147;may,&#148;
&#147;should,&#148; &#147;plans,&#148; &#147;targets&#148;
and/or similar expressions. These forward-looking statements are
based on Action Performance&#146;s current estimates and
assumptions and, as such, involve uncertainty and risk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The forward-looking statements are not guarantees of future
performance, and actual results may differ materially from those
contemplated by these forward-looking statements. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this proxy statement, or, in the
case of documents attached to this proxy statement, as of the
respective dates of such documents. These forward-looking
statements should be read in conjunction with our annual report
on Form&nbsp;10-K for the fiscal year ended September&nbsp;30,
2004, our subsequent quarterly reports on Form&nbsp;10-Q and any
subsequent current reports on Form&nbsp;8-K. Our reports on
Form&nbsp;10-K, Form&nbsp;10-Q and Form&nbsp;8-K are on file
with the United States Securities and Exchange Commission and
copies are available without charge upon request at the address
provided in the section titled &#147;Where You Can Find More
Information&#148; on page&nbsp;75.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to other factors and matters contained in this
document, we believe the following factors could cause actual
results to differ materially from those discussed in the
forward-looking statements:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the failure to satisfy the conditions to consummate the merger,
    including the receipt of the required shareholder or regulatory
    approvals and third party consents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the occurrence of any event, change or other circumstances that
    could give rise to the termination of the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the failure of the merger to close for any other reason;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount of the costs, fees, expenses and charges relating to
    the merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the effect of the announcement of the merger, including
    increased employee turnover;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any decrease in the popularity or growth rate of motorsports,
    and NASCAR racing in particular;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the failure of our existing license agreements to be profitable,
    or our failure to enter into profitable license agreements in
    the future or renew our existing profitable license agreements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the loss of our competitive advantages if we are unable to
    enforce and preserve our rights under our license agreements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our failure to maintain and capitalize on our key license
    agreements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any disruptions in the business of our third-party
    manufacturers, particularly Early Light Industrial Co. Ltd.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our failure to continue to design and market high-quality
    products that appeal to our customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the risks associated with our exclusive relationship with QVC
    and the outsourcing of the operations of our collectors&#146;
    club;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the loss of key members of our senior management;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our dependence on a limited number of mass-merchant retailers to
    purchase a significant portion of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our dependence on a limited number of wholesale distributors to
    sell a significant portion of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the risks related to the transition of our wholesale business to
    a direct to retail distribution model;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">12

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    seasonal fluctuations in our sales;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the impact of higher gasoline prices on consumer demand,
    particularly at race events;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    competition from companies that are able to devote greater
    resources to marketing and promotional campaigns than we do;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    potential adverse trade regulations and restrictions in
    connection with our importation of our die-cast products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our exposure to Chinese and European currency rate fluctuations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    material increases in the cost of the raw materials used to
    manufacture our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    infringement on, or misappropriation of, our intellectual
    property by third parties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    product liability, product recalls, and other claims relating to
    the use of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our failure to continue to meet debt covenants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the additional expenses we must incur in complying with
    corporate governance and public disclosure requirements;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the risks, uncertainties and factors set forth in our reports
    and documents filed with the United States Securities and
    Exchange Commission (which reports should be read in conjunction
    with this proxy statement).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except to the extent required under the federal securities laws,
Action Performance does not intend to update or revise the
forward-looking statements. In the event of any material change
in any of the information previously disclosed, we will, where
relevant and if required under applicable law, update such
information through a supplement to this proxy statement.
</DIV>

<P align="center" style="font-size: 10pt;">13

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<DIV align="left" style="font-size: 10pt;">
<A name='104'></A>
</DIV>

<!-- link1 "PARTIES INVOLVED IN THE PROPOSED TRANSACTION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PARTIES INVOLVED IN THE PROPOSED TRANSACTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Action Performance</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Action Performance Companies, Inc.</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>1480&nbsp;S.&nbsp;Hohokam Drive</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Tempe, Arizona 85281</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Telephone: (602)&nbsp;337-3700</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance is the leader in the design, promotion,
marketing and distribution of licensed motorsports merchandise.
Our products include a broad range of motorsports-related
die-cast replica collectibles, apparel, souvenirs and other
sports-inspired memorabilia. Action Performance markets and
distributes products through a variety of channels including the
Action Racing Collectables network of wholesale distributors and
dealers, the Racing Collectables Club of America, QVC,
goracing.com, trackside at racing events, direct corporate
promotions, mass retail and department stores, specialty dealers
and select online retailers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>ISC, SMI, SMISC and Motorsports Authentics</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>International Speedway Corporation</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>1801&nbsp;W.&nbsp;International Speedway Blvd.</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Daytona Beach, Florida 32174</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Telephone: (386)&nbsp;254-2700</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Speedway Motorsports, Inc.</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>5555 Concord Parkway South</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Concord, North Carolina 28027</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Telephone: (704)&nbsp;455-3239</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SMISC, LLC</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Motorsports Authentics, Inc.</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>6047 Tyvola Glen Circle</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Charlotte, North Carolina 28217</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>Telephone: (386)&nbsp;254-2700</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>(704)&nbsp;455-3239</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ISC is a leading promoter of motorsports activities in the
United States, currently promoting more than 100&nbsp;racing
events annually as well as numerous other motorsports-related
activities. ISC owns and/or operates 11 of the nation&#146;s
major motorsports entertainment facilities, including Daytona
International Speedway in Florida (home of the Daytona 500);
Talladega Superspeedway in Alabama; Michigan International
Speedway located outside Detroit; Richmond International Raceway
in Virginia; California Speedway near Los Angeles; Kansas
Speedway in Kansas City, Kansas; Phoenix International Raceway
in Arizona; Homestead-Miami Speedway in Florida; Martinsville
Speedway in Virginia; Darlington Raceway in South Carolina; and
Watkins Glen International in New York. Other motorsports
entertainment facility ownership includes an indirect 37.5%
interest in Raceway Associates, LLC, which owns and operates
Chicagoland Speedway and Route 66 Raceway near Chicago,
Illinois. ISC also owns and operates the Motor Racing Network,
Inc. radio network, or MRN Radio, the nation&#146;s largest
independent sports radio network in terms of event programming;
DAYTONA USA&nbsp;&#151; the Ultimate Motorsports Attraction, a
motorsports-themed entertainment complex and the Official
Attraction of NASCAR; and subsidiaries which provide catering
services, food and beverage concessions, and produce and market
motorsports-related merchandise under the trade name
&#147;Americrown.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMI is a leading marketer and promoter of motorsports
entertainment in the United States. SMI owns and operates the
following premier facilities: Atlanta Motor Speedway, Bristol
Motor Speedway, Infineon Raceway, Las Vegas Motor Speedway,
Lowe&#146;s Motor Speedway and Texas Motor Speedway. SMI
provides souvenir merchandising services through its SMI
Properties subsidiaries, and manufactures and distributes
</DIV>

<P align="center" style="font-size: 10pt;">14

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<DIV align="left" style="font-size: 10pt;">
smaller-scale, modified racing cars through its 600 Racing
subsidiary. SMI also owns Performance Racing Network, which
broadcasts syndicated motorsports programming to over 710 radio
stations nationwide.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC is a Delaware limited liability company that is equally
owned by ISC and SMI. SMISC does business through its
subsidiaries, which engage in the business of designing,
marketing and distributing licensed motorsports merchandise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Motorsports Authentics, Inc. is a newly-formed Arizona
corporation and an indirect wholly-owned subsidiary of SMISC.
SMISC formed Motorsports Authentics for the sole purpose of
entering into the merger agreement and consummating the
transactions contemplated by the merger agreement. Motorsports
Authentics has not engaged in any business except in
anticipation of the merger.
</DIV>

<P align="center" style="font-size: 10pt;">15
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<DIV align="left" style="font-size: 10pt;">
<A name='105'></A>
</DIV>

<!-- link1 "THE SPECIAL MEETING" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>THE SPECIAL MEETING</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='106'></A>
</DIV>

<!-- link1 "General" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The enclosed proxy is solicited on behalf of our board of
directors for use at a special meeting of shareholders to be
held
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, at 8:00&nbsp;a.m., local time, or at any adjournments or
postponements of the special meeting, for the purposes set forth
in this proxy statement and in the accompanying notice of
special meeting. The special meeting will be held at Action
Performance&#146;s corporate headquarters located at
1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281. Action
Performance intends to mail this proxy statement and the
accompanying proxy card on or
about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005 to all shareholders entitled to vote at the special meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The special meeting will be held for the following purposes:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    to consider and vote upon a proposal to approve a merger
    agreement which provides for the merger of Motorsports
    Authentics with and into Action Performance, with Action
    Performance continuing as the surviving corporation of the
    merger, and the conversion of each outstanding share of common
    stock of Action Performance into the right to receive $13.00 in
    cash, without interest (other than shares held (i)&nbsp;as
    treasury shares or by any subsidiary of Action Performance or
    (ii)&nbsp;by SMISC, Motorsports Authentics or any subsidiary of
    Motorsports Authentics);&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    to transact such other business as may properly come before the
    special meeting and any adjournments or postponements of the
    special meeting, including, if submitted to a vote of the
    shareholders, a motion to adjourn the special meeting to another
    time or place for the purpose of soliciting additional proxies.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
<A name='107'></A>
</DIV>

<!-- link1 "Record Date and Voting Information" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Record Date and Voting Information</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Only holders of record of Action Performance common stock at the
close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, the record date for the special meeting, are entitled to
notice of, and to vote at, the special meeting and any
adjournments or postponements thereof. At the close of business
on the record
date, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Action Performance common stock were outstanding and entitled
to vote at the special meeting. A list of shareholders will be
available for review at Action Performance&#146;s executive
offices during regular business hours beginning two business
days after notice of the special meeting is given and continuing
to the date of the special meeting and will be available for
review at the special meeting or any adjournment thereof. Each
holder of record of Action Performance common stock on the
record date will be entitled to one vote for each share held. If
you sell or transfer your shares of Action Performance common
stock after the record date but before the special meeting, you
will transfer the right to receive the $13.00 in cash per share,
without interest, if the merger is consummated to the person to
whom you sell or transfer your shares, but you will retain your
right to vote at the special meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All votes will be tabulated by the inspector of elections
appointed for the special meeting, who will separately tabulate
affirmative and negative votes, abstentions and broker
non-votes. Brokers who hold shares in &#147;street name&#148;
for clients typically have the authority to vote on
&#147;routine&#148; proposals when they have not received
instructions from beneficial owners. Absent specific
instructions from the beneficial owner of the shares, however,
brokers are not allowed to exercise their voting discretion with
respect to the approval of non-routine matters, such as the
merger agreement. Proxies submitted without a vote by brokers on
these matters are referred to as &#147;broker non-votes.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='108'></A>
</DIV>

<!-- link1 "Quorum" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quorum</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shares entitled to vote at the special meeting may take action
on a matter at the special meeting only if a quorum of those
shares exists with respect to that matter. The presence, in
person or by proxy, of the holders of a majority of the
outstanding shares of Action Performance common stock entitled
to vote at the special meeting is necessary to constitute a
quorum for the transaction of business at the special meeting.
If a share is represented for any purpose at the special meeting
it will be deemed present for purposes of determining whether a
quorum exists.
</DIV>

<P align="center" style="font-size: 10pt;">16

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any shares of Action Performance common stock held in treasury
by Action Performance are not considered to be outstanding on
the record date or otherwise entitled to vote at the special
meeting for purposes of determining a quorum.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shares represented by proxies reflecting abstentions and
properly executed broker non-votes are counted for purposes of
determining whether a quorum exists at the special meeting.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='109'></A>
</DIV>

<!-- link1 "Required Vote" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Required Vote</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The affirmative vote of a majority of the outstanding shares of
Action Performance common stock on the record date of the
special meeting is required to approve the merger agreement and
the transactions contemplated thereby, including the merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Proxies that reflect abstentions and broker non-votes, as well
as proxies that are not returned, will have the same effect as a
vote against approval of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the special meeting is adjourned or postponed for any reason,
at any subsequent reconvening of the special meeting, all
proxies will be voted in the same manner as they would have been
voted at the original convening of the meeting, except for any
proxies that have been revoked or withdrawn.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='110'></A>
</DIV>

<!-- link1 "Proxies and Revocation of Proxies" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Proxies and Revocation of Proxies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholders of record may submit proxies by mail. After
carefully reading and considering the information contained in
this proxy statement, you should complete, date and sign your
proxy card and mail the proxy card in the enclosed postage paid
return envelope as soon as possible so that your shares of
Action Performance common stock may be voted at the special
meeting, even if you plan to attend the special meeting in
person. Submitting a proxy now will not limit your right to vote
at the special meeting if you decide to attend in person. If
your shares are held of record in &#147;street name&#148; by a
broker or other nominee and you wish to vote in person at the
special meeting, you must obtain from the record holder a proxy
issued in your name.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Proxies received at any time before the special meeting and not
revoked or superseded before being voted will be voted at the
special meeting. If the proxy indicates specific voting
instructions, it will be voted in accordance with the voting
instructions. If no voting instructions are indicated, the proxy
will be voted <B>&#147;FOR&#148;</B> approval of the merger
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Please do not send in stock certificates at this time. If the
merger is consummated, you will receive instructions regarding
the procedures for exchanging your existing Action Performance
stock certificates for the $13.00&nbsp;per share cash payment,
without interest.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any person giving a proxy pursuant to this solicitation has the
power to revoke and change it at any time before it is voted. It
may be revoked and changed by filing a written notice of
revocation with the Secretary of Action Performance at Action
Performance&#146;s executive offices located at
1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281, by
submitting in writing a proxy bearing a later date, or by
attending the special meeting and voting in person. Attendance
at the special meeting will not, by itself, revoke a proxy. If
you have given voting instructions to a broker or other nominee
that holds your shares in &#147;street name,&#148; you may
revoke those instructions by following the directions given by
the broker or other nominee.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='111'></A>
</DIV>

<!-- link1 "Expenses of Proxy Solicitation" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Expenses of Proxy Solicitation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This proxy statement is being furnished in connection with the
solicitation of proxies by our board of directors. Action
Performance will bear the entire cost of solicitation of
proxies, including costs relating to preparation, assembly,
printing and mailing of this proxy statement, the notice of the
special meeting of shareholders, the enclosed proxy and any
additional information furnished to shareholders. Action
Performance has engaged the services of Georgeson Shareholder
Communications Inc. to solicit proxies and to assist in the
distribution of proxy materials. In connection with its
retention by Action Performance, Georgeson Shareholder
Communications Inc. has agreed to provide consulting and
analytic services and to assist in the
</DIV>

<P align="center" style="font-size: 10pt;">17
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<DIV align="left" style="font-size: 10pt;">
solicitation of proxies, primarily from banks, brokers,
institutional investors and individual shareholders. Action
Performance has agreed to pay Georgeson Shareholder
Communications Inc. a fee of $20,000 plus reasonable
out-of-pocket expenses for its services. Action Performance also
has agreed to indemnify Georgeson Shareholder Communications
Inc. against any losses arising from any proxy solicitation
services provided on our behalf. Copies of solicitation
materials will also be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of
Action Performance common stock beneficially owned by others to
forward to these beneficial owners. Action Performance may, upon
request, reimburse brokers, bankers and other nominees
representing beneficial owners of Action Performance common
stock for their costs of forwarding solicitation materials to
the beneficial owners. Original solicitation of proxies by mail
may be supplemented by telephone or personal solicitation by
directors, officers or other regular employees of Action
Performance. No additional compensation will be paid to
directors, officers or other regular employees for their
services.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='112'></A>
</DIV>

<!-- link1 "Adjournments and Postponements" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Adjournments and Postponements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although it is not currently expected, the special meeting may
be adjourned or postponed for the purpose of soliciting
additional proxies. If the special meeting is adjourned to a
different place, date or time, Action Performance need not give
notice of the new place, date or time if the new place, date or
time is announced at the meeting before adjournment or
postponement, unless a new record date is or must be set for the
adjourned meeting. Our board of directors must fix a new record
date if the meeting is adjourned to a date more than
120&nbsp;days after the date fixed for the original meeting. Any
adjournment or postponement of the special meeting for the
purpose of soliciting additional proxies will allow Action
Performance&#146;s shareholders who have already sent in their
proxies to revoke them at any time prior to their use at the
special meeting as adjourned or postponed.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='113'></A>
</DIV>

<!-- link1 "Attending the Special Meeting" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Attending the Special Meeting</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to attend the special meeting in person, you must be a
shareholder of record on the record date, hold a valid proxy
from a record holder or be an invited guest of Action
Performance. You will be asked to provide proper identification
at the registration desk on the day of the meeting or any
adjournment or postponement of the meeting.
</DIV>

<P align="center" style="font-size: 10pt;">18
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<DIV align="left" style="font-size: 10pt;">
<A name='114'></A>
</DIV>

<!-- link1 "SPECIAL FACTORS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SPECIAL FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='115'></A>
</DIV>

<!-- link1 "Background of the Merger" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Background of the Merger</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Over the past several years, Action Performance has received a
variety of inquiries from third parties who wished to explore
the possibility of engaging in a business combination or other
transaction with Action Performance. In response to several of
those inquiries, Action Performance engaged financial advisers
to assist it in reviewing and evaluating these potential
transactions. In each case, the discussions were terminated due
to an inability to agree on purchase price and other
considerations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;1, 2004, Mr.&nbsp;Fred W. Wagenhals, our chief
executive officer, met with Mr.&nbsp;W. Garrett Crotty, the
general counsel of ISC, Mr.&nbsp;George Pyne, the chief
operating officer of NASCAR, Inc. and Mr.&nbsp;Todd Wilson, the
chief financial officer of NASCAR, Inc., at Action
Performance&#146;s corporate headquarters in Tempe, Arizona.
Mr.&nbsp;Crotty attended this meeting at the request of
Mr.&nbsp;Pyne and Mr.&nbsp;Wilson. At this meeting,
Mr.&nbsp;Crotty expressed ISC&#146;s interest in acquiring
Action Performance&#146;s trackside business unit. Messrs. Pyne
and Crotty also indicated that, if Action Performance was not
interested in selling only one business unit, they knew of other
entities that might be interested in acquiring Action
Performance&#146;s other businesses. In particular, they
mentioned that a third party, referred to herein as
&#147;Company&nbsp;A,&#148; had an interest in acquiring Action
Performance&#146;s apparel business. The parties agreed that a
previously executed confidentiality agreement would cover their
discussions on the prospective transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June 9, 2004, at a regularly scheduled meeting of the board
of directors of Action Performance attended by representatives
of Action Performance&#146;s outside corporate counsel, Mr.
Wagenhals reviewed with the board of directors ISC&#146;s
interest in acquiring Action Performance&#146;s trackside
business and the prospect of selling other Action Performance
business units to other interested parties. Mr.&nbsp;Wagenhals
expressed his point of view that, given Action
Performance&#146;s relative disadvantage in terms of financial
resources and its strategic position within the NASCAR-themed
licensed goods business, the sale of the company could be the
best alternative for its shareholders. Management and the board
of directors had an extensive discussion on the strategic
rationale for such transactions, the attributes of the
businesses under consideration for sale, anticipated prices and
terms and alternative strategies. Action Performance&#146;s
outside counsel reviewed for the board of directors the
background legal framework and fiduciary responsibilities of the
board of directors in connection with a transaction of that
type. Mr. Wagenhals noted that Action Performance had previously
retained SunTrust Robinson Humphrey for investment banking
services and the board of directors requested that SunTrust
Robinson Humphrey assist management and the board of directors
in negotiating the terms and evaluating the merits of any
potential transaction. At the conclusion of this discussion, the
board of directors authorized Mr. Wagenhals to continue the
discussions with the interested parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;6, 2004, Mr.&nbsp;Wagenhals met with
Ms.&nbsp;Lesa France Kennedy, the President of ISC,
Mr.&nbsp;John Saunders, the chief operating officer of ISC,
Mr.&nbsp;Crotty and Ms.&nbsp;Tracie Winters, senior director of
business development of ISC, at the Indianapolis Motor Speedway
in Indianapolis, Indiana. Also attending the meeting were
Mr.&nbsp;Wagenhals&#146; attorney and a representative of
Company&nbsp;A. At this meeting, Ms.&nbsp;Kennedy and
Mr.&nbsp;Saunders reiterated ISC&#146;s interest in acquiring
Action Performance&#146;s trackside business. The parties also
discussed various deal structures, including structures under
which Action Performance would sell its trackside and apparel
businesses but retain its die-cast collectibles and novelties
business. Subsequent to this meeting, on August&nbsp;17 and
18th, representatives of ISC traveled to Action
Performance&#146;s headquarters for the purposes of conducting
due diligence regarding this transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;19, 2004, at a regularly scheduled meeting of the
board of directors of Action Performance attended by
representatives of Action Performance&#146;s outside corporate
counsel, Mr. Wagenhals updated the board of directors regarding
the progress since the last board of directors meeting on the
potential transactions involving Action Performance&#146;s
trackside and apparel businesses, including the discussions that
had taken place, the parties involved, terms being discussed and
related matters. At the conclusion of this discussion, the board
of directors authorized Mr. Wagenhals to continue the
discussions with ISC and Company&nbsp;A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;4, 2004, Mr.&nbsp;Wagenhals had a telephone
conference with Mr.&nbsp;Saunders and Mr.&nbsp;Crotty during
which they discussed the terms pursuant to which ISC would be
willing to acquire Action
</DIV>

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<DIV align="left" style="font-size: 10pt;">
Performance&#146;s trackside business, including pricing terms.
The parties contemplated that Company&nbsp;A would purchase
Action Performance&#146;s apparel business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;14, 2004, Messrs.&nbsp;Wagenhals and Saunders
had a telephone conference during which they continued
discussions concerning ISC&#146;s proposed acquisition of Action
Performance&#146;s trackside business, again focusing on the
proposed valuation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November 11, 2004, at a regularly scheduled meeting of the
board of directors of Action Performance attended by
representatives of Action Performance&#146;s outside corporate
counsel, Mr. Wagenhals reviewed his communications with ISC and
Company&nbsp;A since the last board of directors meeting and
also reviewed the price and key terms under which he would
recommend a sale of Action Performance&#146;s trackside and
apparel businesses. After discussion of the required price and
terms of a transaction and the attributes of the trackside and
apparel businesses, the board of directors authorized Mr.
Wagenhals to continue the discussions with ISC and
Company&nbsp;A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;29, 2004, Messrs.&nbsp;Wagenhals and David M.
Riddiford, our chief financial officer, along with
Ms.&nbsp;Melodee L. Volosin, our executive vice president and
chief operating officer, met with Messrs.&nbsp;Crotty and
Michael Gentry, the president of Americrown, the wholly-owned
subsidiary of ISC engaged in merchandise and souvenir sales,
Ms.&nbsp;Tracie Winters and a representative of Company A, in
New York, New York. At this meeting, Messrs.&nbsp;Wagenhals and
Riddiford discussed various trends in Action Performance&#146;s
trackside and apparel businesses. The parties also discussed
various terms for the proposed purchase of Action
Performance&#146;s trackside business by ISC and its apparel
business by Company A. A follow-up meeting was held on
November&nbsp;30, 2004, among Messrs.&nbsp;Crotty, Wagenhals and
a representative of Company A, along with Ms.&nbsp;Winters and
Ms.&nbsp;Susan Schandel, chief financial officer of ISC, and
Glenn R. Padgett, chief counsel-operations of ISC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December 10, 2004, at a regularly scheduled meeting of the
board of directors of Action Performance attended by
representatives of Action Performance&#146;s outside corporate
counsel, Messrs. Wagenhals and Riddiford and Ms. Volosin
provided a summary of the November&nbsp;29, 2004 meeting with
ISC and Company&nbsp;A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;27, 2004 and December&nbsp;29, 2004,
Messrs.&nbsp;Wagenhals and Saunders engaged in a series of
telephone conferences. During these conferences, the parties
discussed the range of an overall purchase price for Action
Performance&#146;s trackside and apparel businesses, the
relative values of such businesses and how that purchase price
might be allocated between ISC and Company A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;13, 2005, Mr.&nbsp;Wagenhals had a telephone
conference with Messrs.&nbsp;Saunders and Crotty. On this call,
the parties further discussed the terms for a proposed purchase
of Action Performance&#146;s trackside business by ISC and its
apparel business by Company A. During this discussion,
Mr.&nbsp;Saunders indicated that ISC and Company&nbsp;A had to
date been unable to agree upon the relative values of the two
businesses and how the overall purchase price should be
allocated between them. He also indicated that, in any such
transaction, the overall purchase price to be paid by ISC and
Company&nbsp;A would likely not reach the valuation level
previously required by Mr.&nbsp;Wagenhals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February 1 and&nbsp;2, 2005, Messrs.&nbsp;Wagenhals and
Riddiford met with Mr.&nbsp;Saunders, Mr.&nbsp;Crotty and
Ms.&nbsp;Winters, a representative of Company A and
Mr.&nbsp;Pyne in Concord, North Carolina. At these meetings, the
parties discussed the licenses held by Action Performance from
various driver teams for use in the trackside, apparel and
die-cast collectibles and novelties businesses and whether such
licenses could be split among the three businesses in the event
Action Performance sold its trackside business to ISC and its
apparel business to Company A and retained its die-cast
collectibles and novelties business. ISC indicated that, in any
transaction, it would require that it receive direct licenses
from the driver teams for the trackside businesses and that it
and Action Performance would need to enter into an agreement
providing for Action Performance to be the exclusive supplier to
ISC of hardgoods. The parties were joined at various times
during these discussions by representatives of Action
Performance&#146;s driver team licensors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February 13, 2005, at a regularly scheduled meeting of the
board of directors of Action Performance attended by
representatives of Snell &#38; Wilmer L.L.P., Action
Performance&#146;s new outside corporate counsel
</DIV>

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<DIV align="left" style="font-size: 10pt;">
(which we refer to in this proxy statement as Snell &#38;
Wilmer), Messrs. Wagenhals and Riddiford reviewed for the board
of directors the February 1 and 2, 2005 meetings with ISC,
Company&nbsp;A and certain driver teams and provided the board
of directors with an update on the status of discussions
regarding the price and terms for the proposed transaction, as
well as ISC&#146;s requirement for a direct license with driver
teams and its proposed terms for an exclusive supply agreement
with Action Performance. After an extensive discussion of these
matters, the board of directors and management concluded that
the proposed terms were not acceptable. The board of directors
authorized Mr. Wagenhals to notify ISC and Company&nbsp;A of its
determination. Following the meeting, Mr. Wagenhals notified ISC
and Company&nbsp;A of the board of directors&#146; determination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;7, 2005, Messrs.&nbsp;Wagenhals and Riddiford had
a telephone conference with Mr.&nbsp;Saunders. During this
conference, Mr.&nbsp;Saunders informed Messrs.&nbsp;Wagenhals
and Riddiford that Action Performance&#146;s proposed terms for
the sale of its trackside and apparel businesses were not
acceptable to ISC and that ISC was terminating any further
discussions regarding such a transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;22, 2005, Mr.&nbsp;Wagenhals had a telephone
conference with Mr.&nbsp;Marcus Smith, SMI&#146;s executive vice
president, during which Mr.&nbsp;Smith indicated that SMI was
interested in acquiring Action Performance.
Messrs.&nbsp;Wagenhals and Smith agreed to arrange a meeting,
subsequently set for April&nbsp;13, 2005, among
Mr.&nbsp;Riddiford, Mr.&nbsp;William Brooks, SMI&#146;s chief
financial officer, and other representatives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;12, 2005, Messrs.&nbsp;Wagenhals and Brooks had a
telephone conference in which they discussed SMI&#146;s interest
in acquiring Action Performance and the types of information
that SMI would be interested in reviewing at the April&nbsp;13,
2005 meeting. Later that day, Mr. Riddiford discussed the
proposed transaction with SunTrust Robinson Humphrey.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;13, 2005, Mr.&nbsp;Riddiford met with
Messrs.&nbsp;Brooks and Marcus Smith, and Mr.&nbsp;John Bickford
Sr., a former officer and director of, and now a consultant to,
Action Performance, in Charlotte, North Carolina. At this
meeting, Mr.&nbsp;Riddiford provided SMI with a general overview
of Action Performance&#146;s business and a summary of publicly
available historical financial information and information
concerning Action Performance&#146;s historical trends, its
turnaround strategy and timeframe and its future plans and
potential. Following the meeting, Mr.&nbsp;Riddiford noted that
SMI would need to execute a confidentiality agreement if it
wanted to review non-public information concerning Action
Performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;15, 2005, Mr.&nbsp;Wagenhals met with
Messrs.&nbsp;Marcus Smith and &nbsp;David Hynes in Concord,
North Carolina. Mr.&nbsp;Smith indicated at this meeting that
SMI remained interested in acquiring Action Performance and
outlined various benefits that SMI believed would accrue to
their respective businesses and shareholders in the event such a
transaction could be accomplished.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;29, 2005, Messrs.&nbsp;Riddiford and Brooks had a
telephone conference during which they discussed the terms of
the confidentiality agreement that Action Performance desired
for SMI to sign prior to continuing discussions on the proposed
transaction. Later that day, Action Performance and SMI entered
into a confidentiality agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;2, 2005, at a regularly scheduled meeting of the
board of directors of Action Performance attended by
representatives of Snell&nbsp;&#38; Wilmer,
Messrs.&nbsp;Wagenhals and Riddiford reviewed their
communications with SMI, including SMI&#146;s expression of
interest in acquiring Action Performance. The board of directors
also reviewed materials prepared by SunTrust Robinson Humphrey
concerning the proposed transaction with SMI. In connection with
this review, the board of directors was provided with SMI&#146;s
annual report on Form&nbsp;10-K and other publicly available
information concerning SMI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;19, 2005, Messrs.&nbsp;Wagenhals, Bickford, Marcus
Smith, Bruton Smith, the chief executive officer of SMI, Brooks
and Hynes met in Charlotte, North Carolina. At this meeting, the
SMI representatives reiterated to Mr.&nbsp;Wagenhals that SMI
was interested in acquiring all of Action Performance&#146;s
outstanding shares of capital stock and discussed with
Mr.&nbsp;Wagenhals SMI&#146;s potential valuation of Action
Performance and a proposed timetable for such a transaction. SMI
indicated to Mr.&nbsp;Wagenhals at this meeting that it expected
to make a formal written offer to Action Performance with
respect to such a transaction.
</DIV>

<P align="center" style="font-size: 10pt;">21

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;20, 2005, Messrs.&nbsp;Riddiford and Brooks had a
telephone conference in which they reviewed the meeting from the
prior day and discussed the timing of the proposed offer and
Action Performance&#146;s response. Mr.&nbsp;Riddiford indicated
to Mr.&nbsp;Brooks at this time that Action Performance would
need to receive a written, non-binding letter of intent
indicating a purchase price for all of Action Performance&#146;s
outstanding shares before it could proceed any further.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;21, 2005, SMI distributed a draft letter of intent
to Mr.&nbsp;Riddiford, Snell&nbsp;&#38; Wilmer and SunTrust
Robinson Humphrey in which it indicated that it would be willing
to acquire all of Action Performance&#146;s outstanding shares
of capital stock in a stock-for-stock transaction for
approximately $9.56&nbsp;per share (such value being based on
each company&#146;s closing price on May&nbsp;20, 2005). This
draft letter was distributed to our board of directors and, over
the next few days, members of Action Performance&#146;s board of
directors and senior management discussed this offer and
concluded it was inadequate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the period of discussion concerning the SMI offer, on
May&nbsp;23, 2005, at the request of ISC, Mr.&nbsp;Wagenhals and
Mr.&nbsp;Bickford met with Mr.&nbsp;Saunders in Charlotte, North
Carolina. At this meeting, Mr.&nbsp;Saunders indicated that ISC
was interested in acquiring all of Action Performance&#146;s
outstanding shares of capital stock. Mr.&nbsp;Saunders presented
Mr.&nbsp;Wagenhals with a letter that confirmed ISC&#146;s
interest in such a transaction but did not indicate a price.
Mr.&nbsp;Saunders requested that Action Performance allow ISC to
conduct due diligence on Action Performance and agree to grant
ISC an exclusivity period in which to engage in negotiations
concerning the proposed transaction. Mr.&nbsp;Wagenhals
indicated to Mr.&nbsp;Saunders that he would discuss ISC&#146;s
proposal at the meeting of Action Performance&#146;s board of
directors scheduled for later that week.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May 26, 2005, at a special meeting of the board of directors
attended by representatives of Snell &#38; Wilmer and SunTrust
Robinson Humphrey, the directors discussed the transaction
activity. Messrs.&nbsp;Wagenhals and Riddiford reviewed for the
board members the respective businesses of SMI and ISC, as well
as their communications to date with each, and also discussed
the written proposals received from each of SMI and ISC (which
the board members had previously received). In connection with
this review, Snell &#38; Wilmer, which had previously provided
the board of directors with written materials regarding its
fiduciary duties and the background legal framework for change
of control transactions, led a discussion regarding these
matters. In addition, SunTrust Robinson Humphrey presented the
board with a written review of Action Performance, ISC and SMI,
as well as process options and a timeframe if the board of
directors determined to pursue a more extensive sale process.
After an extensive discussion of the proposed transaction, as
well as the strategic, operational and other issues facing
Action Performance, as described below under &#147;&#151;Reasons
for the Merger; Recommendations of Our Board of Directors;
Fairness of the Merger,&#148; the board of directors authorized
management to continue to discuss the potential transactions
with SMI and ISC and to attempt to guide the discussions toward
a cash or part-cash transaction. The board of directors advised
management, however, that, at this time, it wanted to maintain
the flexibility to pursue a standalone business plan if the
discussions were not successfully concluded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;31, 2005, Messrs.&nbsp;Saunders and Marcus Smith
initiated a telephone conference with Mr.&nbsp;Wagenhals. On
this call, Messrs.&nbsp;Saunders and Smith informed
Mr.&nbsp;Wagenhals that ISC and SMI intended to form a joint
venture to pursue an acquisition of Action Performance. The
parties scheduled a meeting for June&nbsp;7, 2005 at Action
Performance&#146;s corporate headquarters at which ISC and SMI
would make a joint presentation to Action Performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;2, 2005, Ms.&nbsp;Kennedy called Ms.&nbsp;Volosin,
to request that Ms.&nbsp;Volosin seek to arrange a meeting
between Ms.&nbsp;Kennedy and Mr.&nbsp;Herbert M. Baum, then
Action Performance&#146;s lead outside director and currently
our executive chairman, at Mr.&nbsp;Baum&#146;s home in West
Palm Beach, Florida.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;3, 2005, Mr.&nbsp;Baum and Ms.&nbsp;Kennedy met at
Mr.&nbsp;Baum&#146;s home. At this meeting, Mr.&nbsp;Baum and
Ms.&nbsp;Kennedy discussed ISC&#146;s and SMI&#146;s mutual
interest in Action Performance, their strategic rationale for
acquiring Action Performance and the potential benefits to each
of the companies from such a transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;6, 2005, Ms.&nbsp;Volosin and Ms.&nbsp;Kennedy met
in Phoenix, Arizona. At this meeting, Ms.&nbsp;Kennedy and
Ms.&nbsp;Volosin discussed the agenda for the planned meeting
the following day.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;7, 2005, Messrs.&nbsp;Wagenhals and Riddiford and
Ms.&nbsp;Volosin met with Ms.&nbsp;Kennedy, Mr.&nbsp;Saunders,
Mr.&nbsp;Crotty, Ms.&nbsp;Winters, and Ms.&nbsp;Schandel and
Mr.&nbsp;Brooks and Mr.&nbsp;James Scudder, the controller of
SMI, at Action Performance&#146;s corporate headquarters in
Tempe, Arizona. Also attending the meeting were representatives
of Snell&nbsp;&#38; Wilmer and Mr.&nbsp;Wagenhals&#146; personal
attorney. At the beginning of this meeting, the parties
negotiated, and reached an agreement in principle, on the terms
of a confidentiality and standstill agreement to be executed
between Action Performance, ISC and SMI. Following this
agreement in principle, the representatives of Action
Performance gave a presentation on Action Performance&#146;s
strategic direction, future plans and growth potential and also
provided the ISC and SMI representatives with financial
projections, including estimates of the benefits that an
acquisition of Action Performance would provide to ISC and SMI.
Following this presentation, Mr.&nbsp;Brooks, on behalf of ISC
and SMI, presented Action Performance with an offer to acquire
all of its outstanding shares of capital stock for a price of
$10.00&nbsp;per share in cash. As part of the discussions,
representatives of ISC indicated that they were then actively
negotiating the purchase of another company that distributes and
licenses motorsports merchandise and that they intended to grow
their business in that area, which would compete with Action
Performance. Following a series of discussions among the parties
that same day, ISC and SMI raised their offer to $12.00&nbsp;per
share in cash. After further discussion and at the conclusion of
the meeting, ISC and SMI asked Action Performance if it would
consider a combined cash and stock offer of $14.00&nbsp;per
share, consisting of $10.00&nbsp;per share in cash,
$2.00&nbsp;per share in ISC stock and $2.00&nbsp;per share in
SMI stock, although Action Performance did not consider such
inquiry to be a firm offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June 8, 2005, Messrs. Wagenhals and Riddiford and Ms. Volosin
met at Action Performance&#146;s corporate headquarters in
Tempe, Arizona. At this meeting, the parties called SunTrust
Robinson Humphrey to update it on the discussions of the day
before, including the negotiations over valuation and price,
ISC&#146;s and SMI&#146;s proposed cash offer and the
discussions concerning a potential part cash, part stock offer.
SunTrust Robinson Humphrey concurred in management&#146;s
assessment that based, among other things, on the past trading
range of Action Performance&#146;s stock, which had exceeded
$14.00 per share as recently as March 2005, and the proposed use
of ISC and SMI stock as consideration in the transaction, any
offer from ISC and SMI to acquire Action Performance was more
likely to be accepted if it exceeded $14.00 per share. At the
conclusion of the meeting, Mr.&nbsp;Wagenhals called
Mr.&nbsp;Crotty and informed him of this assessment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June 10, 2005, at a special meeting of the board of directors
attended by Snell &#38; Wilmer and SunTrust Robinson Humphrey,
Messrs. Wagenhals and Riddiford and Ms. Volosin reviewed the
ISC/SMI offer. The members of the board of directors were again
informed by Snell &#38; Wilmer of their fiduciary duties and the
background legal framework with respect to change of control
transactions. SunTrust Robinson Humphrey led a discussion of its
updated valuation materials relating to Action Performance, the
ISC/SMI proposal and historical and projected financial
information. After a thorough discussion regarding SunTrust
Robinson Humphrey&#146;s presentation, including extensive
questions from the members of the board of directors, as well as
discussion concerning the strategic, operational and other
issues facing Action Performance, as described below under
&#147;&#151;&nbsp;Reasons for the Merger; Recommendations of Our
Board of Directors; Fairness of the Merger,&#148; the board of
directors determined to authorize Mr.&nbsp;Baum to present a
counter-proposal to ISC and SMI of $16.00 per share, consisting
of at least $8.00 per share in cash and up to $4.00 per share in
ISC stock and $4.00 per share in SMI stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;13, 2005, Messrs.&nbsp;Baum, Wagenhals and
Riddiford and Ms.&nbsp;Volosin had a telephone conference with
Ms.&nbsp;Kennedy, Messrs.&nbsp;Saunders and Crotty and
Ms.&nbsp;Winters and Messrs.&nbsp;Marcus Smith and Brooks. On
this call, Mr.&nbsp;Baum presented Action Performance&#146;s
counter-proposal. After further discussion, Ms.&nbsp;Kennedy
indicated that ISC and SMI would review the counter-proposal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;14, 2005, Action Performance entered into a
confidentiality and standstill agreement with ISC and SMI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;20, 2005, Mr.&nbsp;Baum had a telephone conference
with Ms.&nbsp;Kennedy. Ms.&nbsp;Kennedy requested that a team
composed of ISC and SMI representatives, including
representatives of Wachovia Securities, their financial advisor,
be permitted to conduct due diligence at Action
Performance&#146;s corporate headquarters in Tempe, Arizona.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;27, 2005, the ISC/SMI due diligence team arrived at
Action Performance&#146;s corporate headquarters in Tempe,
Arizona and proceeded to conduct a due diligence review of
various aspects of Action Performance&#146;s business over the
period of June 27-28th. This review included a review of
business documents, as well as a series of meetings with Action
Performance&#146;s legal and finance personnel, including its
general counsel, Mr.&nbsp;Kory Klecker, and its controller,
assistant controller, internal audit manager and tax manager.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;18, 2005, Mr.&nbsp;Baum met with Ms.&nbsp;Kennedy
and Mr.&nbsp;Marcus Smith at the airport in West Palm Beach,
Florida. At this meeting, Ms.&nbsp;Kennedy and Mr.&nbsp;Smith
confirmed to Mr.&nbsp;Baum their offer for all outstanding
shares of capital stock of Action Performance of $12.00&nbsp;per
share in cash. The parties discussed this offer and
Ms.&nbsp;Kennedy indicated that a written offer would follow.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In a letter dated July&nbsp;21, 2005, ISC and SMI submitted a
non-binding written proposal for the acquisition of Action
Performance. This proposal, however, omitted any price, and
further indicated that any agreed upon price would be subject to
adjustment for transaction fees, change in control payments and
other items.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;27, 2005, Mr.&nbsp;Wagenhals met for dinner with
Mr.&nbsp;Baum and the other independent members of Action
Performance&#146;s board of directors in Phoenix, Arizona. At
this dinner, Messrs.&nbsp;Wagenhals and Baum discussed the
course of negotiations to date, including the pricing
discussions, as well as the written proposal received on
July&nbsp;21, 2005. After discussion, the board members
indicated to Messrs.&nbsp;Wagenhals and Baum that they did not
think the $12.00&nbsp;per share price was adequate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;28, 2005, Mr.&nbsp;Wagenhals, after conferring with
SunTrust Robinson Humphrey and updating it on the discussions to
date, sent a letter to ISC and SMI in which he informed them
that the offer of $12.00&nbsp;per share in cash was inadequate,
and that a price of at least $14.50&nbsp;per share, which could
be composed of part cash and part stock, would be necessary to
proceed with the transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Later on July&nbsp;28, 2005, at a special meeting of the board
of directors attended by Snell&nbsp;&#38; Wilmer and SunTrust
Robinson Humphrey, the board of directors engaged in extensive
discussions concerning the negotiations with ISC and SMI. The
members of the board of directors were again informed by
Snell&nbsp;&#38; Wilmer of their fiduciary duties and the
background legal framework with respect to change of control
transactions. SunTrust Robinson Humphrey led a discussion of its
updated valuation materials relating to Action Performance, the
ISC/SMI proposal and historical and projected financial
information. After a thorough discussion regarding SunTrust
Robinson Humphrey&#146;s presentation, including extensive
questions from the members of the board of directors, the board
of directors ratified the rejection of the ISC/SMI offer as
inadequate, and further communications among the parties were
terminated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;5, 2005, Ms.&nbsp;Kennedy called Ms.&nbsp;Volosin
to ask whether Action Performance was interested in resuming
discussions. They agreed to arrange a meeting for
August&nbsp;18, 2005 in Charlotte, North Carolina. Between
August&nbsp;5, 2005 and August&nbsp;18, 2005, Ms.&nbsp;Kennedy
and Ms.&nbsp;Volosin engaged in a series of communications
pursuant to which they coordinated the agenda and logistics for
the meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;18, 2005, Messrs.&nbsp;Baum (who, at the
July&nbsp;28, 2005 meeting of the board of directors had been
elected as Action Performance&#146;s executive chairman),
Wagenhals and Riddiford and Ms.&nbsp;Volosin met with
Ms.&nbsp;Kennedy, Messrs.&nbsp;Saunders and Crotty, and
Ms.&nbsp;Schandel, Ms.&nbsp;Winters and Ms.&nbsp;Kelly Lee,
ISC&#146;s manager of presidential projects and
Messrs.&nbsp;Bruton Smith, Marcus Smith, Brooks and Donnie
Bobbitt, vice president of business operations of SMI, along
with Mr.&nbsp;Hynes in Charlotte, North Carolina. Also attending
the meeting were representatives of SunTrust Robinson Humphrey
and other Action Performance managers, as well as
representatives of Wachovia Securities. At this meeting, the
Action Performance representatives gave a presentation to the
group covering various business initiatives that Action
Performance was undertaking that were not included in the
information previously shown to ISC and SMI. There also was
discussion concerning the status of Action Performance&#146;s
material license agreements, its relationships with racetrack
owners and key drivers and driver teams and existing litigation
in which Action Performance was a party. In addition, the ISC
representatives indicated that the planned acquisition of
another company that distributes and licenses motorsports
merchandise would shortly be completed. Following the conclusion
of this presentation, Mr.&nbsp;Saunders, on behalf of ISC and
SMI, reiterated to Action Performance the offer to acquire all
of Action Performance&#146;s outstanding shares of capital stock
for a price of $12.00&nbsp;per share. Later that day,
</DIV>

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<DIV align="left" style="font-size: 10pt;">
following a series of discussions among the parties over
valuation issues and projections, Mr.&nbsp;Bruton Smith, on
behalf of ISC and SMI, presented to Action Performance a last
and final offer to acquire all of its outstanding shares of
capital stock for a price of $13.00&nbsp;per share in cash. The
Action Performance representatives agreed to present this final
offer to Action Performance&#146;s board of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August 22, 2005, the Action Performance board of directors
held a special meeting at Action Performance&#146;s corporate
headquarters in Tempe, Arizona, which was attended by Snell
&#38; Wilmer and SunTrust Robinson Humphrey. At this meeting,
Snell &#38; Wilmer led a discussion concerning the board&#146;s
fiduciary duties in connection with a change of control
transaction. In addition, SunTrust Robinson Humphrey provided an
update of its ongoing valuation review. After hearing SunTrust
Robinson Humphrey&#146;s update, the board engaged in extensive
discussion concerning the revised offer of $13.00 per share in
cash. At the conclusion of this discussion, the board of
directors determined that it would be in the best interests of
Action Performance and its shareholders to pursue an all-cash
transaction at $13.00 per share. In reaching its preliminary
determination, the board of directors considered the strategic,
operational and other issues facing Action Performance, as
described below under &#147;&#151;Reasons for the Merger;
Recommendations of Our Board of Directors; Fairness of the
Merger,&#148; as well as, among other things: (1)&nbsp;the
current financial projections of Action Performance, including
the risks of achievement, in light of Action Performance&#146;s
recent history of declining financial performance and its
inability to meet internal targets; (2)&nbsp;the relationship of
the $13.00 per share cash merger consideration to the current
and historical trading prices of Action Performance&#146;s
common stock; (3)&nbsp;the board of directors&#146; assessment,
based on the discussions with SunTrust Robinson Humphrey and its
unsuccessful attempts in recent years to engage other potential
buyers in substantive discussions, that it would be unlikely for
any financial or strategic buyer to pay more than $13.00 per
share for Action Performance&#146;s common stock; and
(4)&nbsp;management&#146;s concern that ISC and SMI were
expanding their trackside souvenir merchandising and licensing
activities that compete with Action Performance and that their
ownership of racetracks that currently host the majority of
NASCAR Nextel Cup events could provide them with advantages in
pursuing and obtaining licenses with driver teams. The board of
directors instructed Mr.&nbsp;Wagenhals to communicate its
willingness to pursue discussions with them based upon a price
of $13.00 per share; provided, that any ultimate merger
agreement must both allow Action Performance flexibility in
responding to unsolicited inquiries from third parties and not
contain provisions that would preclude a superior proposal.
Later that day, Mr. Wagenhals contacted ISC and SMI to inform
them of the board of directors&#146; determination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Later on the evening of August&nbsp;22, 2005, Baker Botts L.L.P.
(which we refer to in this proxy statement as Baker Botts),
counsel to ISC, distributed an initial draft of the proposed
merger agreement, together with a related shareholder agreement,
to Mr.&nbsp;Wagenhals, who forwarded it to the board of
directors, Snell&nbsp;&#38; Wilmer and SunTrust Robinson
Humphrey. The board of directors requested that Snell&nbsp;&#38;
Wilmer, following its initial review of the draft agreement,
travel to Charlotte, North Carolina to negotiate the terms of
the agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;23, 2005, Snell&nbsp;&#38; Wilmer delivered to
Messrs.&nbsp;Baum, Wagenhals, Riddiford and Klecker a summary of
the key provisions of the draft merger agreement and shareholder
agreement, together with its initial comments to the draft
agreement that it proposed to deliver to ISC and SMI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;24, 2005, Messrs.&nbsp;Baum, Wagenhals, Riddiford
and Klecker met by telephone, together with representatives of
Snell&nbsp;&#38; Wilmer, to discuss Snell&nbsp;&#38;
Wilmer&#146;s summary of the terms of the draft merger
agreement. Snell&nbsp;&#38; Wilmer presented its summary of the
key provisions of the merger agreement and shareholder
agreement, with particular focus on the firmness of the
$13.00&nbsp;per share price, as well as the deal protection
provisions, including termination events and termination fees,
non-solicitation provisions and the ability of the board of
directors to change its recommendation of the transaction. The
parties discussed these issues as well as comments to the draft
merger agreement submitted by SunTrust Robinson Humphrey.
Messrs.&nbsp;Baum, Wagenhals, Riddiford and Klecker provided
Snell&nbsp;&#38; Wilmer with guidance on how to respond to the
initial draft of the merger agreement. In addition, there was
discussion concerning the willingness of Action
Performance&#146;s senior executives to consider post-closing
employment with SMISC. Later that day, Snell&nbsp;&#38; Wilmer
distributed its summary of the key issues raised by the draft
agreements as well as its initial comments on the full draft
merger agreement and shareholder agreement to ISC, SMI and their
respective counsel, and then traveled to North Carolina to
engage in negotiations. On the evening of August&nbsp;24, 2005,
at
</DIV>

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<DIV align="left" style="font-size: 10pt;">
the offices of SMI&#146;s counsel in Charlotte, North Carolina,
Snell&nbsp;&#38; Wilmer and representatives of ISC, SMI and
their respective counsel discussed the major issues identified
in Snell&nbsp;&#38; Wilmer&#146;s key issues summary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;25, 2005, Snell&nbsp;&#38; Wilmer and the
representatives of ISC, SMI and their respective counsel
discussed Snell&nbsp;&#38; Wilmer&#146;s comments to the draft
merger agreement, including the representations and warranties,
the covenants regarding interim operations of Action Performance
and the issues raised in Snell&nbsp;&#38; Wilmer&#146;s key
issues summary. As part of this discussion, ISC and SMI
indicated that they would be speaking with
Messrs.&nbsp;Wagenhals and Riddiford and Ms.&nbsp;Volosin
concerning potential post-closing employment terms. During the
course of the day, Messrs.&nbsp;Baum and Riddiford met by
telephone with representatives of Snell&nbsp;&#38; Wilmer to
discuss the key issues. Snell&nbsp;&#38; Wilmer briefed
Messrs.&nbsp;Baum and Riddiford on the progress of negotiations
on those and other points and Messrs.&nbsp;Baum and Riddiford
provided guidance on the terms they wanted to be reflected in
the merger agreement. On the evening of August&nbsp;25, 2005,
following the conclusion of discussions for the day, Baker Botts
distributed a revised draft of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Between August&nbsp;25, 2005 and August&nbsp;28, 2005, while
negotiations on the merger agreement were taking place in
Charlotte, North Carolina, representatives of ISC and SMI
traveled to Action Performance&#146;s corporate headquarters in
Tempe, Arizona to continue due diligence on Action Performance
and to interview employees of Action Performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;26, 2005, Snell&nbsp;&#38; Wilmer and the
representatives of ISC, SMI and their respective counsel
discussed the revised draft of the merger agreement, including
the representations and warranties, the covenants regarding
interim operations of Action Performance and the issues raised
in Snell&nbsp;&#38; Wilmer&#146;s key issues summary. During the
course of the day, Messrs.&nbsp;Baum, Wagenhals and Riddiford
and Ms.&nbsp;Volosin, together with representatives of
Snell&nbsp;&#38; Wilmer, had a telephone conference with, from
ISC, Ms.&nbsp;Kennedy, and, from SMI, Mr.&nbsp;Marcus Smith, and
the other representatives of ISC, SMI and their respective
counsel, concerning the key issues in the merger agreement,
including provisions concerning the proposed requirement that
Action Performance obtain consents to the transaction from its
key driver and driver team licensors and other vendors. There
was also discussion concerning the timing of the transaction and
the potential announcement of the transaction. Following further
discussions regarding the merger agreement, on the evening of
August&nbsp;26, 2005, Baker Botts distributed a new revised
draft of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;27, 2005, the board of directors of Action
Performance met by telephone, together with representatives of
SunTrust Robinson Humphrey and Snell&nbsp;&#38; Wilmer. In
advance of the meeting, the members of the board of directors
had received written materials, including an updated valuation
presentation from SunTrust Robinson Humphrey, the most recent
draft of the merger agreement and a summary of the key terms of
the merger agreement. At the meeting, upon the advice of
Snell&nbsp;&#38; Wilmer, the board of directors determined to
form a special committee to review the transaction for purposes
of the Arizona anti-takeover statute. Under the statute, the
entry into the shareholder agreement by Mr.&nbsp;Wagenhals and
SMISC could render SMISC an &#147;interested shareholder&#148;
and prevent any transaction with SMISC for a period of three
years, unless the transaction was approved in advance by a
committee made up of disinterested members of the board of
directors. With advice from Snell&nbsp;&#38; Wilmer, the board
of directors determined that Dr.&nbsp;Roy Herberger,&nbsp;Jr.,
Lowell L. Robertson, Michael L. Gallagher, Robert L. Matthews
and Anne L. Mariucci were disinterested directors for purposes
of the Arizona statute. Accordingly, the board of directors
adopted resolutions establishing a special committee comprised
of the foregoing members. Following such action,
Snell&nbsp;&#38; Wilmer reported on the status of the merger
agreement negotiations, summarized and discussed with the board
of directors the material terms of the merger agreement,
particularly the provisions regarding the ability of the board
of directors to change its recommendation or pursue a superior
offer and the termination, break-up fee and expense
reimbursement provisions, as well as selected terms that were
being finalized. Snell&nbsp;&#38; Wilmer also discussed the
directors&#146; fiduciary duties. SunTrust Robinson Humphrey
then provided an update of its valuation review of the
$13.00&nbsp;per share offer. After discussion, the board of
directors authorized Messrs.&nbsp;Baum, Wagenhals and Riddiford
and Ms.&nbsp;Volosin, together with Snell&nbsp;&#38; Wilmer, to
seek to complete its negotiations concerning the key provisions
of the merger agreement, and also agreed to meet the following
day.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On the afternoon of August&nbsp;27, 2005, Baker Botts,
responding to further comments submitted by Snell&nbsp;&#38;
Wilmer, distributed a revised draft of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August 28, 2005, the board of directors met by telephone,
along with representatives of Snell &#38; Wilmer and SunTrust
Robinson Humphrey. In advance of the meeting, the members of the
board of directors had again received written materials,
including a memorandum from Snell &#38; Wilmer concerning the
board&#146;s fiduciary duties in connection with a change of
control transaction, the most recent draft of the merger
agreement, a draft of the merger agreement showing the
negotiated changes since the initial draft that had been
distributed on August&nbsp;22, 2005, a summary of the key terms,
and SunTrust Robinson Humphrey&#146;s draft fairness opinion. At
the meeting, SunTrust Robinson Humphrey orally rendered its
opinion (which was subsequently confirmed in writing) as to the
fairness, from a financial point of view, of the $13.00 per
share cash consideration to Action Performance&#146;s
shareholders who will receive the merger consideration pursuant
to the merger agreement. In addition, Snell &#38; Wilmer briefed
the board of directors on the status of the merger agreement,
the key terms of the agreement and the material changes that had
been negotiated over the course of the past several days, and
again discussed the board of directors&#146; fiduciary duties.
The board of directors engaged in extensive discussions
concerning the merger agreement in light of the strategic,
operational and other issues facing Action Performance, as
described below under &#147;&#151;&nbsp;Reasons for the Merger;
Recommendations of Our Board of Directors; Fairness of the
Merger,&#148; including, in particular, the closing condition
insisted upon by ISC and SMI that Action Performance receive
consents from specified key driver and driver team licensors and
other vendors and the risks that the transaction could fail if
Action Performance could not obtain such consents. The board of
directors next discussed the need for ISC and SMI to address
employee integration and related issues to ensure ordinary
course operation of the business during the period between
signing and closing. Finally, Mr. Wagenhals and Ms. Volosin
discussed the progress of discussions with ISC and SMI regarding
the terms of their post-closing employment. The board of
directors meeting was then adjourned to later that evening, to
be reconvened following the meeting of the special committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On the evening of August&nbsp;28, 2005, the special committee of
the board of directors met by telephone, along with
representatives of Snell&nbsp;&#38; Wilmer. After discussion,
the special committee, by unanimous vote, adopted resolutions
approving and adopting the merger agreement and the shareholder
agreement, and approving SMISC as an &#147;interested
shareholder&#148; for purposes of the Arizona anti-takeover
statute.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The special committee meeting was then adjourned, at which time
the meeting of the full board of directors was reconvened,
together with representatives of Snell&nbsp;&#38; Wilmer and
SunTrust Robinson Humphrey. Based on the opinion of SunTrust
Robinson Humphrey and other factors considered by the board, the
board of directors unanimously adopted resolutions approving and
adopting the merger agreement and the transactions contemplated
by the merger agreement, including the merger, determining that
the merger agreement and the transactions contemplated by the
merger agreement, including the merger, are advisable and fair
to, and in the best interests of, holders of Action Performance
common stock and recommending that the holders of Action
Performance common stock vote for the approval of the merger
agreement and the transactions contemplated by the merger
agreement, including the merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;29, 2005, in accordance with the authorizations
of their respective boards of directors, the parties finalized
and thereafter executed the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On the morning of August&nbsp;30, 2005, ISC, SMI and Action
Performance issued a press release announcing the execution of
the merger agreement and filed Current Reports on Form&nbsp;8-K
announcing the same and filing the merger agreement as an
exhibit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Discussions regarding the proposed employment arrangements among
the surviving corporation and certain executive officers of
Action Performance are ongoing as of the date of this proxy
statement.
</DIV>

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<DIV align="left" style="font-size: 10pt;">
<A name='116'></A>
</DIV>

<!-- link1 "Reasons for the Merger; Recommendations of our Board of Directors; Fairness of the Merger" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Reasons for the Merger; Recommendations of our Board of
Directors; Fairness of the Merger</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The Action Performance Board of Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors of Action Performance, by unanimous vote
at a meeting on August&nbsp;28, 2005, adopted resolutions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
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    <TD width="96%"></TD>
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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    approving the merger agreement and the transactions contemplated
    by the merger agreement, including the merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    determining that the merger agreement and the transactions
    contemplated by the merger agreement, including the merger, are
    advisable and fair to, and in the best interests of, holders of
    Action Performance common stock;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    recommending that the holders of Action Performance common stock
    vote for the approval of the merger agreement and the
    transactions contemplated by the merger agreement, including the
    merger. See &#147;&#151;&nbsp;Background of the Merger&#148;
    above for additional information on the recommendation of our
    board of directors.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In reaching its determinations, the board of directors consulted
with management, as well as its outside financial and legal
advisors, and considered the short-term and long-term interests
and prospects of Action Performance and the interests of its
shareholders. The board of directors also considered the
fairness opinion presented to the board of directors by SunTrust
Robinson Humphrey. See &#147;&#151;&nbsp;Opinion of SunTrust
Robinson Humphrey&#148; below for a description of SunTrust
Robinson Humphrey&#146;s fairness opinion. In reaching the
foregoing determinations, the board of directors considered the
following material factors that it believed potentially
supported its determinations:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B>Recent and current strategic environment of Action
    Performance&#146;s business, characterized by the following
    attributes:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the other entities that participate in the business of
    producing, marketing and selling NASCAR themed licensed
    merchandise have significantly greater financial resources than
    Action Performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the business of producing, marketing and selling NASCAR themed
    licensed merchandise was maturing and likely would attract
    additional competition and potentially require additional
    investment to maintain Action Performance&#146;s current market
    position; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the business of producing, marketing and selling NASCAR themed
    licensed merchandise would likely undergo consolidation.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B>Recent and current operating environment of Action
    Performance&#146;s business, characterized by the following
    attributes:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the increasing concentration of sales in a limited number of
    NASCAR drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    past success in growing the NASCAR licensed goods category that
    led to increased expectations from the driver teams in terms of
    the levels of royalties guaranteed by Action Performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a shift in the growth of demand for NASCAR licensed goods from
    channels well-developed by Action Performance, such as trackside
    and specialty motor sports retailers, to those where Action
    Performance has less expertise, such as mass markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the accelerated pace of change in the regular and special paint
    schemes of race cars in NASCAR events, which placed additional
    demands and costs on Action Performance&#146;s process of
    producing and marketing collectible die-cast race cars;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the requirement by consumers to produce collectible die-cast
    race cars in lower numbers, which increases the cost to produce
    those cars;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">28

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    deflationary retail pricing of Action Performance&#146;s
    collectible die-cast race cars in the specialty motor sports
    retail channel caused by historical overproduction, a two-step
    distribution process utilizing distributors and the growth of
    internet based re-sellers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    consumer demand for a greater variety of, and better quality,
    NASCAR licensed apparel, which increases the cost to produce
    that apparel; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    limited opportunities in the near term to increase prices.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B>The strategies implemented by Action Performance&#146;s
    management and the board of directors over the past two years to
    address the foregoing changes, including the following:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reducing debt to strengthen Action Performance&#146;s future
    financial resources;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    making changes in senior management to gain traditional consumer
    products experience;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reorganizing the marketing and production process for
    collectible die-cast race cars;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    seeking to extend and retain key licensors prior to the
    expiration date of the license under economic terms acceptable
    to Action Performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    shifting its distribution method for the specialty motorsports
    retail channel from a two-step method of distribution to a
    direct-to-retailer method;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    seeking to reduce both operating and capital expenditures in
    order to free up cash flow to improve profitability, fund
    product improvements and provide funds to invest in the
    business; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    focusing on increasing mass market distribution and sales and
    hiring a senior executive with extensive mass market sales
    experience.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While each of these strategies are currently underway, there is
no assurance that such strategies could be successfully executed
or that, if executed, such strategies would succeed in improving
Action Performance&#146;s market standing and financial results.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B>Current and historical results of operations of Action
    Performance:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ongoing risks of Action Performance&#146;s business,
    including its declining financial results and the risks
    associated with its 2006 plan, such as the need for the
    successful implementation of the planned change in its
    distribution model, and continuing restructuring actions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance&#146;s failure to achieve its budget in
    recent quarters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance&#146;s failure to maintain compliance with
    certain financial covenants in its credit agreement;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B>Strategic considerations:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the lack of interest, over a long period, of other potential
    parties in pursuing a combination with Action Performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the lack of a clear successor to Fred&nbsp;W. Wagenhals, Action
    Performance&#146;s founder and chief executive officer, and the
    lack of overall management depth in light of the strategic
    initiatives being undertaken by Action Performance and the
    operational challenges that it faced in implementing such
    initiatives;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC&#146;s (and its owners&#146;) knowledge of and presence in
    the motorsports entertainment industry, and their ability to
    assist in promoting the transaction to drivers, driver teams,
    automobile manufacturers and other interested parties who would
    need to support and/or consent to the transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ability, financial and otherwise, of SMISC (or its
    owners&#146;) to compete with Action Performance;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">29

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the relationship of the $13.00&nbsp;per share cash merger
    consideration to (a)&nbsp;the trading price of Action
    Performance&#146;s common stock on August&nbsp;26, 2005, the
    last trading day prior to the date upon which our board of
    directors approved the merger agreement and the transactions
    contemplated thereby (an approximately 5.9% premium),
    (b)&nbsp;the trading price of Action Performance&#146;s common
    stock at the end of July 2005 (an approximately 52.0% premium),
    and (c)&nbsp;the volume weighted average price of Action
    Performance&#146;s common stock over the past&nbsp;30, 60 and
    90&nbsp;days, respectively (an approximately 21.3%, 31.1% and
    33.9% premium, respectively);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the course of negotiations of the merger consideration,
    including the efforts made to negotiate for more than
    $13.00&nbsp;per share and the fact that the $13.00&nbsp;per
    share cash merger consideration represents a premium over the
    $9.56&nbsp;per share purchase price first proposed by SMI;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that the consideration to be received by Action
    Performance&#146;s shareholders in the merger will consist
    entirely of cash rather than stock, which will provide liquidity
    and certainty of value to Action Performance&#146;s shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC&#146;s (and its owners&#146;) financial strength and
    capacity to complete the transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC&#146;s (and its owners&#146;) belief that the transaction
    would not raise antitrust concerns with regulatory authorities,
    nor create antitrust or a similar cause of action by private
    parties;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><B>&#149;&nbsp;</B></TD>
    <TD align="left">
    <B>the presentation relating to and the opinion of SunTrust
    Robinson Humphrey that, as of August&nbsp;28, 2005, the
    $13.00&nbsp;per share cash merger consideration was fair, from a
    financial point of view, to the shareholders of Action
    Performance who will receive such merger consideration pursuant
    to the merger agreement;</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><B>&#149;&nbsp;</B></TD>
    <TD align="left">
    <B>the terms and conditions of the merger agreement, and the
    course of negotiations thereof, including:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the board&#146;s right to engage in negotiations with, and
    provide information to, a third party that makes an unsolicited
    acquisition proposal if the board of directors determines in
    good faith, after consultation with its independent legal and
    financial advisors, that it is required to do so in order to
    comply with its fiduciary duties and that such proposal
    constitutes or is reasonably likely to lead to a superior
    proposal;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the board&#146;s right to change its recommendation to
    shareholders of the transaction if an unsolicited superior
    proposal has been made and if the board of directors believes
    that it is required to do so in order to comply with its
    fiduciary duties, subject to the payment of a termination fee
    and expense reimbursement to SMISC;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance&#146;s right to terminate the merger
    agreement in order to accept a superior proposal, subject to
    certain conditions and the payment of a termination fee and
    expense reimbursement to SMISC;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the termination fee and expense reimbursement provisions of the
    merger agreement, as compared to termination fees and expense
    reimbursement provisions in similar transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the closing conditions to the merger, including (a)&nbsp;the
    requirement that Action Performance deliver consents to the
    transaction from specified drivers, driver teams and automobile
    manufacturers whose contracts with Action Performance given them
    consent rights to the transfer of their contracts to Motorsports
    Authentics in connection with the merger, and the ability of
    Action Performance to obtain such consents; and (b)&nbsp;the
    ability of SMISC to terminate the agreement due to a
    &#147;material adverse effect&#148; as a result of the
    negotiated changes to the definition of such term;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that, because Motorsports Authentics is a newly formed
    entity that may not have any significant assets unless the
    merger is consummated, ISC and SMI agreed to severally (but not
    jointly) guarantee all obligations of SMISC and Motorsports
    Authentics through the closing date under the merger agreement,
    including the payment of the merger consideration;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">30

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that the merger agreement would be available promptly
    following the public disclosure of the merger via the SEC&#146;s
    EDGAR database as part of a current report on Form&nbsp;8-K to
    be filed by Action Performance (such Form&nbsp;8-K was filed by
    Action Performance on August&nbsp;30, 2005);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a comparison of the terms and conditions of the merger agreement
    to recent precedent transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the careful review of the representations and warranties in the
    merger agreement, and the preparation of Action
    Performance&#146;s disclosure schedules, by Action
    Performance&#146;s management team and its outside
    counsel;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the active and direct role of the members of the board of
    directors in guiding the negotiations with respect to the
    proposed merger, the consideration of the transaction by the
    board of directors in several board of directors meetings, the
    experience of the board members with Action Performance and the
    past general business experience of such members.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors also considered a variety of risks and
other potentially negative factors concerning the merger. These
factors included the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that, following the merger, Action Performance&#146;s
    public shareholders will cease to participate in any future
    earnings growth of Action Performance or benefit from any future
    increase in its value;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the price offered was in the upper end, but not at the top, of
    the range in which Action Performance&#146;s stock traded over
    the past year;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that if Action Performance could achieve its
    &#147;aggressive&#148; 2006 plan, and a market price based on a
    multiple of EBITDA consistent with its current multiple, its
    stock price could trade above $13.00&nbsp;per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the numerous closing conditions to the merger and, in
    particular, the potential difficulty in obtaining the consents
    of the specified drivers, driver teams and automobile
    manufacturers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that, for United States federal income tax purposes,
    the cash merger consideration will generally be taxable to
    U.S.&nbsp;holders of Action Performance common stock entitled to
    receive such consideration;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the possible disruption to Action Performance&#146;s business
    that may result from the announcement of the merger and the
    resulting distraction of the attention of Action
    Performance&#146;s management;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that the failure to consummate the merger could
    negatively impact the market price of Action Performance&#146;s
    common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that, until the merger is consummated or the merger
    agreement is terminated, Action Performance may not be able to
    enter into a merger or business combination with another party
    at a favorable price because of restrictions in the merger
    agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that the uncertainties associated with the merger may
    cause Action Performance to lose key personnel;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the fact that shareholders of Action Performance will not be
    entitled to dissenters&#146; rights under Arizona law.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors believes that sufficient procedural
safeguards were and are present to ensure the substantive and
procedural fairness of the merger to the shareholders of Action
Performance and to permit the board of directors to represent
effectively the interests of the shareholders of Action
Performance. These procedural safeguards include the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the board of directors retained and received the advice of
    Snell&nbsp;&#38; Wilmer L.L.P., its independent legal counsel,
    and SunTrust Robinson Humphrey, its financial advisor, and
    requested that SunTrust Robinson Humphrey render an opinion with
    respect to the fairness, from a financial point of view, of the
    consideration to be received by holders of Action Performance
    common stock pursuant to the</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">31

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    merger agreement. Both of these advisors have extensive
    experience in transactions similar to the merger and assisted
    the board of directors in its negotiations with ISC and
    SMI;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the board of directors and its advisors conducted extensive
    negotiations with ISC and SMI.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foregoing discussion of the information and factors
considered by our board of directors is not intended to be
exhaustive but, we believe, addresses the material factors
considered by our board of directors. The board of directors
considered a wide variety of complex factors in evaluating the
merger and considered each such factor as part of the total mix
of information available to it, without quantifying or otherwise
assigning a relative weight to each specific factor it
considered in reaching its determinations. Our board of
directors made its judgment based on this mix of information,
including its analysis of the overall effect of the merger on
the Action Performance shareholders compared to any alternative
transaction or to remaining an independent company, and
individual members of our board of directors may have given
different weight to different factors. Our board of directors
did not attempt to distinguish between factors that support a
determination that the merger is &#147;fair&#148; and factors
that support a determination that the merger is in the
&#147;best interests&#148; of the shareholders of Action
Performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the factors outlined above, our board of directors
unanimously determined that the merger agreement and the
transactions contemplated by the merger agreement, including the
merger, are advisable and fair to, and in the best interests of,
the Action Performance shareholders entitled to receive the
merger consideration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Our board of directors believes that the merger is advisable
and fair to, and in the best interests of, the Action
Performance shareholders entitled to receive the merger
consideration. Our board of directors unanimously recommends
that you vote &#147;FOR&#148; approval of the merger
agreement.</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='117'></A>
</DIV>

<!-- link1 "Opinion of SunTrust Robinson Humphrey" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Opinion of SunTrust Robinson Humphrey</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance engaged SunTrust Robinson Humphrey as its
financial advisor in connection with the merger. At meetings of
the board of directors of Action Performance on August&nbsp;27,
2005 and August&nbsp;28, 2005, SunTrust Robinson Humphrey
reviewed its financial analysis of the merger and delivered its
oral opinion (subsequently confirmed in writing) that, as of the
date of such opinion and based upon and subject to certain
matters stated therein, the consideration to be received in the
merger is fair, from a financial point of view, to the holders
of Action Performance&#146;s common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The full text of the opinion of SunTrust Robinson Humphrey,
dated August&nbsp;28, 2005, which sets forth the assumptions
made, matters considered and limitations on the review
undertaken, is attached as Annex&nbsp;B to this proxy statement
and is incorporated herein by reference. The description of the
SunTrust Robinson Humphrey opinion set forth herein is qualified
in its entirety by reference to the full text of the SunTrust
Robinson Humphrey opinion. Holders of Action Performance common
stock are urged to read the opinion in its entirety.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey&#146;s opinion is directed to the
board of directors of Action Performance and relates only to the
fairness, from a financial point of view, of the consideration
to be received by the holders of Action Performance&#146;s
common stock pursuant to the merger. SunTrust Robinson
Humphrey&#146;s opinion does not address any other aspect of the
merger and does not constitute a recommendation to any
shareholder as to how such shareholder should vote or act on any
matter related to the merger.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Material and Information Considered with Respect to the
    Merger</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In arriving at its opinion, SunTrust Robinson Humphrey, among
other things:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed and analyzed a draft of the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed certain publicly available information concerning
    Action Performance that SunTrust Robinson Humphrey deemed
    relevant;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">32
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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed and analyzed certain historical and projected financial
    and operating data with respect to Action Performance furnished
    to SunTrust Robinson Humphrey by Action Performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    conducted discussions with members of management of Action
    Performance concerning its business, operations, assets, present
    condition and future prospects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed a trading history of Action Performance&#146;s common
    stock from August&nbsp;25, 2000 to the present and a comparison
    of that trading history with those of other publicly traded
    reference companies that SunTrust Robinson Humphrey deemed
    relevant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    compared the historical and projected financial results and
    present financial condition of Action Performance with those of
    selected publicly traded reference companies that SunTrust
    Robinson Humphrey deemed relevant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed and compared the financial terms of the merger with
    financial terms, to the extent publicly available, of selected
    merger and acquisition reference transactions that SunTrust
    Robinson Humphrey deemed relevant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed historical data relating to percentage premiums paid in
    acquisitions of publicly traded companies from January&nbsp;1,
    2004 to the present that SunTrust Robinson Humphrey deemed
    relevant;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reviewed other financial statistics and undertook other analyses
    and investigations as SunTrust Robinson Humphrey deemed
    appropriate.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In arriving at its opinion, SunTrust Robinson Humphrey assumed
and relied upon the accuracy and completeness of the financial
and other information provided to it by Action Performance
without independent verification. With respect to the financial
forecasts of Action Performance, SunTrust Robinson Humphrey was
advised by the senior management of Action Performance that they
were reasonably prepared and reflected the best available
estimates and judgments of the management of Action Performance.
In arriving at its opinion, SunTrust Robinson Humphrey did not
conduct a physical inspection of the properties and facilities
of Action Performance. SunTrust Robinson Humphrey has not made
or obtained any evaluations or appraisals of the assets or
liabilities (including, without limitation, any potential
environmental liabilities), contingent or otherwise, of Action
Performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey&#146;s opinion is necessarily based
upon market, economic and other conditions as they existed and
could be evaluated on, and on the information made available to
SunTrust Robinson Humphrey as of, the date of its opinion. The
financial markets in general and the market for the common stock
of Action Performance, in particular, are subject to volatility,
and SunTrust Robinson Humphrey&#146;s opinion did not address
potential developments in the financial markets, the underlying
valuation, future performance or long-term viability of Action
Performance or the market for the common stock of Action
Performance after the date of its opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of its opinion, SunTrust Robinson Humphrey assumed
that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the merger would be consummated in accordance with the terms of
    the merger agreement without any waiver of any material terms or
    conditions;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    all material governmental, regulatory or other consents or
    approvals (contractual or otherwise) necessary for the
    consummation of the merger would be obtained without requiring
    any restrictions, including any divestiture requirements or
    amendments or modifications, that would have a material adverse
    effect on Action Performance or the expected benefits of the
    merger.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent developments may affect SunTrust Robinson
Humphrey&#146;s opinion and SunTrust Robinson Humphrey does not
have any obligation to update, revise or reaffirm its opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In preparing its opinion, SunTrust Robinson Humphrey performed a
variety of financial and comparative analyses, a summary of
which are described below. The summary is not a complete
description of the analyses underlying SunTrust Robinson
Humphrey&#146;s opinion. The preparation of a fairness opinion
is a complex
</DIV>

<P align="center" style="font-size: 10pt;">33

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<DIV align="left" style="font-size: 10pt;">
analytic process involving various determinations as to the most
appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances
and, therefore, is not readily susceptible to summary
description. Accordingly, SunTrust Robinson Humphrey believes
that its analyses must be considered as an integrated whole and
that selecting portions of its analyses and factors, without
considering all analyses and factors, could create a misleading
or incomplete view of the processes underlying such analyses and
SunTrust Robinson Humphrey&#146;s opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In performing its analyses, SunTrust Robinson Humphrey made
numerous assumptions with respect to Action Performance,
industry performance and general business, economic, market and
financial conditions, many of which are beyond the control of
Action Performance. The estimates contained in these analyses
and the valuation ranges resulting from any particular analysis
are not necessarily indicative of actual values or predictive of
future results or values, which may be significantly more or
less favorable than those suggested by such analyses. In
addition, analyses relating to the value of businesses or
securities do not purport to be appraisals or to reflect the
prices at which businesses or securities actually may be sold.
Accordingly, these analyses and estimates are inherently subject
to substantial uncertainty.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey&#146;s opinion and analyses were only
one of many factors considered by the board of directors of
Action Performance in their evaluation of the merger and should
not be viewed as determinative of the views of the board of
directors or management of Action Performance with respect to
the merger, the terms, or the consideration to be received by
the common shareholders of Action Performance in the merger. The
consideration to be received by the shareholders of Action
Performance in the merger was determined on the basis of
negotiations between Action Performance, ISC and SMI. The
decision to enter into the merger was made solely by the board
of directors of Action Performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of the material financial and
comparative analyses presented by SunTrust Robinson Humphrey in
connection with its opinion to the board of directors of Action
Performance.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Analysis of Transaction Structure</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey analyzed the consideration of
$13.00&nbsp;per share to be received pursuant to the merger and
Action Performance&#146;s closing stock price on August&nbsp;26,
2005 (the closing price on the last business date prior to the
date SunTrust Robinson Humphrey rendered its opinion to the
Board of Directors of Action Performance) compared to certain
financial data including revenue, earnings before interest,
taxes, depreciation and amortization (&#147;EBITDA&#148;),
earnings before interest and taxes (&#147;EBIT&#148;), earnings
per share (&#147;EPS&#148;) and book value. The financial data
was based on the following time periods: latest twelve months
(&#147;LTM&#148;) ended June&nbsp;30, 2005, the projected fiscal
year ending September&nbsp;30, 2005 (&#147;Fiscal 2005&#148;)
and the projected fiscal year ending September&nbsp;30, 2006
(&#147;Fiscal 2006&#148;). The results of this analysis are
summarized below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey used two sets of projections for its
analysis. The Base Case projections were provided by management
of Action Performance. The Increased Competition Case was also
provided by management of Action Performance and was adjusted to
take into account information and estimates assuming an
increased level of future competition as compared to the Base
Case, including direct competition from ISC and SMI for
trackside sales and driver and team licenses. For purposes of
the table below, the reference to &#147;NM&#148; means &#147;not
measurable.&#148;
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Offer Price</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amounts in thousands,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>except per share data</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Action Performance Stock Price</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Market Capitalization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245,014</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Plus: Gross Debt(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,281</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minus: Cash(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,336</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>242,959</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">34

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Offer Price</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amounts in thousands,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>except per share data</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value as a Multiple of:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.74</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.84</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.84</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.84</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.85</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.5</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.7</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.7</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock Price as a Multiple of:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>NM</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Market Capitalization as a Multiple of:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Book Value(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.03</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    As of June&nbsp;30, 2005.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">35

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey analyzed the value of the
consideration of $13.00&nbsp;per share in cash to be received
pursuant to the merger based on the premium to Action
Performance&#146;s historical stock prices, including Action
Performance&#146;s closing stock price on August&nbsp;26, 2005
(the closing price on the last trading day prior to the date
upon which our board of directors approved the merger agreement
and the transactions contemplated thereby), including the
merger, and July&nbsp;29, 2005 (the closing price immediately
prior to the date that Action Performance announced that Herbert
M. Baum would join Action Performance as its executive chairman
and prior to certain newspaper articles resulting in possible
market speculation about a potential transaction involving
Action Performance) (the closing stock price on July&nbsp;29,
2005 is referred to as the &#147;Unaffected Stock Price&#148;)
and Action Performance&#146;s average stock price for the 5-day,
10-day, 30-day, 60-day and 90-day trading periods preceding
August&nbsp;26, 2005. The results of this analysis are
summarized below.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Volume Weighted</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Closing</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Closing</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Average Stock Price for Last</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>10</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>30</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>60</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>90</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>7/29/05</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>8/26/05</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Days</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Merger price premium(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52.0%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.9%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.6%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.3%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.3%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.1%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.9%</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Premiums based on the merger price of $13.00&nbsp;per share.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Market Analysis of Selected Publicly Traded Reference
    Companies</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey reviewed and compared certain
publicly available financial data, market information and
trading multiples for Action Performance with other selected
publicly traded reference companies that SunTrust Robinson
Humphrey deemed relevant to Action Performance. These companies
are:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Collectibles Companies</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <I>Toy Companies</I></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Boyds Collection, Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Hasbro, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Enesco Group, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    JAKKS Pacific, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    RC2 Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Marvel Enterprises, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Russ Berrie&nbsp;&#38; Company, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Mattel, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Motorsports Companies</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <I>Athletic Products and Apparel Companies</I></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dover Motorsports, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Columbia Sportswear Company</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    International Speedway Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    K2, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Speedway Motorsports, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Nike, Inc.</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Reebok International Ltd.</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Russell Corporation</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    V.F. Corporation</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the selected publicly traded companies, SunTrust Robinson
Humphrey analyzed, among other things, firm value (defined as
market capitalization plus debt less cash and cash equivalents)
as a multiple of: LTM, Fiscal 2005 and Fiscal 2006 revenues;
LTM, Fiscal 2005 and Fiscal 2006 earnings before interest,
taxes, depreciation and amortization (&#147;EBITDA&#148;); and
LTM earnings before interest and taxes (&#147;EBIT&#148;).
SunTrust Robinson Humphrey also compared stock price as a
multiple of LTM and Fiscal 2005 and Fiscal 2006 earnings per
share (&#147;EPS&#148;) and as a multiple of LTM book value per
share as of June&nbsp;30, 2005. All multiples were based on
closing stock prices as of August&nbsp;25, 2005. Historical
revenues, EBITDA and EPS results were based on financial
information available in public filings and press releases of
the selected companies. Projected revenues and EPS estimates
were based on research reports and Bloomberg, I/B/E/S or First
Call consensus estimates. Bloomberg, I/B/E/S and First Call are
information providers that publish a compilation of estimates of
projected financial performance for publicly traded companies
produced by equity
</DIV>

<P align="center" style="font-size: 10pt;">36

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
research analysts at investment banking firms. The following
table sets forth the average multiples indicated by the market
analysis of selected publicly traded reference companies:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>All Selected Reference</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Companies</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.64</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.70</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.59</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.2</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.0</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock Price to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.5</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Book Value Per Share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.1</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based upon the multiples derived from this analysis, Action
Performance&#146;s historical results, and the Base Case
estimates of Action Performance&#146;s projected results for the
fiscal years ending September&nbsp;30, 2005 and
September&nbsp;30, 2006, SunTrust Robinson Humphrey calculated a
range of implied equity values for Action Performance between
$0.00 and $28.56&nbsp;per share with an average equity value of
$10.48&nbsp;per share, a weighted average of $9.71&nbsp;per
share and a median of $6.65&nbsp;per share, based on all of the
selected publicly traded reference companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based upon the multiples derived from this analysis, Action
Performance&#146;s historical results, and the Increased
Competition Case estimates of Action Performance&#146;s
projected results for the fiscal years ending September&nbsp;30,
2005 and September&nbsp;30, 2006, SunTrust Robinson Humphrey
calculated a range of implied equity values for Action
Performance between $0.00 and $28.56&nbsp;per share with an
average equity value of $9.62&nbsp;per share, a weighted average
of $8.75&nbsp;per share and a median of $5.24&nbsp;per share,
based on all of the selected publicly traded reference companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following chart illustrates the weighting which SunTrust
Robinson Humphrey applied to each valuation metric in order to
derive a weighted average for the analysis above:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighting</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock Price to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 EPS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Book Value Per Share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10%</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey noted that none of the companies used
in the market analysis of selected publicly traded reference
companies was identical to Action Performance and that,
accordingly, the analysis necessarily involves complex
considerations and judgments concerning differences in financial
and operating
</DIV>

<P align="center" style="font-size: 10pt;">37

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
characteristics of the companies reviewed and other factors that
would affect the market values of the selected publicly traded
reference companies.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Analysis of Selected Merger and Acquisition Reference
    Transactions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey reviewed and analyzed the
consideration paid and implied transaction multiples in 36
selected completed and pending mergers and acquisitions since
September 1998 that SunTrust Robinson Humphrey deemed relevant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the selected transactions, SunTrust Robinson Humphrey
analyzed, among other things, firm value as a multiple of LTM
revenues; LTM EBITDA; and LTM EBIT. SunTrust Robinson Humphrey
also analyzed equity value as a multiple of LTM net income and
book value. LTM revenues, EBITDA, EBIT, net income and book
value values were based on historical financial information
available in public filings of the acquirer and/or target
companies related to the selected transactions. The following
table sets forth the multiples indicated by this analysis:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reference</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transactions</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.06</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.2</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.0</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.3</TD>
    <TD align="left" valign="bottom" nowrap>x</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Book Value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based upon the multiples derived from this analysis and Action
Performance&#146;s historical results SunTrust Robinson Humphrey
calculated a range of implied equity values for Action
Performance between $0.00 and $23.49&nbsp;per share with an
average equity value of $8.55&nbsp;per share, a weighted average
equity value of $6.99&nbsp;per share and a median equity value
of $4.65&nbsp;per share based on all of the reference
transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following chart illustrates the weighting which SunTrust
Robinson Humphrey applied to each valuation metric in order to
derive a weighted average for the analysis above:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighting</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Book Value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based upon the multiples derived from this analysis and the Base
Case estimates of Action Performance&#146;s projected results
for the fiscal years ending September&nbsp;30, 2005 and
September&nbsp;30, 2006, SunTrust Robinson Humphrey calculated a
range of implied equity values for Action Performance between
$0.00 and $25.43&nbsp;per share with an average equity value of
$9.96&nbsp;per share, a weighted average equity value of
$9.00&nbsp;per share and a median equity value of $8.67&nbsp;per
share based on all of the reference transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based upon the multiples derived from this analysis and the
Increased Competition Case estimates of Action
Performance&#146;s projected results for the fiscal years ending
September&nbsp;30, 2005 and September&nbsp;30, 2006, SunTrust
Robinson Humphrey calculated a range of implied equity values
for Action Performance between $0.00 and $25.43&nbsp;per share
with an average equity value of $9.23&nbsp;per share, a weighted
average equity
</DIV>

<P align="center" style="font-size: 10pt;">38

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
value of $8.12&nbsp;per share and a median equity value of
$6.46&nbsp;per share based on all of the reference transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following chart illustrates the weighting which SunTrust
Robinson Humphrey applied to each valuation metric in order to
derive a weighted average for the analyses above:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighting</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Firm Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 EBIT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity Value to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2006 Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fiscal 2005 Book Value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey noted that no transaction considered
in the analysis of selected merger and acquisition reference
transactions is identical to the merger. All multiples for the
selected transactions were based on public information available
at the time of announcement of such transaction, without taking
into account differing market and other conditions during the
period during which the selected transactions occurred.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Discounted Cash Flow Analysis</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey performed a discounted cash flow
analysis of Action Performance based upon the Base Case
projections for the years ending September&nbsp;30, 2005 through
2010 to estimate the net present equity value per share of
Action Performance. SunTrust Robinson Humphrey calculated a
range of net present firm values for Action Performance over the
projected time period using a weighted average cost of capital
for Action Performance ranging between 10.0% to 20.0% and
terminal value multiples of 2010E EBITDA ranging from 5.0x to
8.0x. The analysis indicated the following per share equity
valuations of Action Performance:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Discounted Present Value of Equity Per Share</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>2010 Terminal Value EBITDA Multiple</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Discount Rate</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5.0x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>6.0x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>6.5x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>7.0x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>8.0x</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    10.0%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20.40</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    12.5%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18.44</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    15.0%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.72</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    17.5%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15.19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    20.0%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.85</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">39
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, SunTrust Robinson Humphrey performed a discounted
cash flow analysis of Action Performance based upon the
Increased Competition Case projections for the years ending
September&nbsp;30, 2005 through 2010 to estimate the net present
equity value per share of Action Performance. SunTrust Robinson
Humphrey calculated a range of net present firm values for
Action Performance over the projected time period using a
weighted average cost of capital for Action Performance ranging
between 10.0% to 20.0% and terminal value multiples of 2010E
EBITDA ranging from 5.0x to 8.0x. The analysis indicated the
following per share equity valuations of Action Performance:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Discounted Present Value of Equity Per Share</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>2010 Terminal Value EBITDA Multiple</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Discount Rate</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5.0x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>6.0x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>6.5x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>7.0x</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>8.0x</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    10.0%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.99</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    12.5%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.70</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    15.0%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.57</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    17.5%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.57</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    20.0%</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.68</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Premiums Paid Analysis</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey analyzed the transaction premiums
paid in all merger and acquisition transactions of publicly
traded companies in the United States with transaction values
between $100 and $500&nbsp;million, effected since
January&nbsp;1, 2004, based on the target company&#146;s stock
price one day, five days and 30&nbsp;days prior to public
announcement of the transaction. This analysis indicated the
following premiums paid in the selected transactions:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Purchase Price Premium</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Prior to Announcement</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Closing Stock</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price on</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1 Day</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5 Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>30 Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>7/29/05(1)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Mean Premium</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.0%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.9%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>32.6%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>32.6%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Median Premium</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21.0%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>20.0%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>26.0%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>26.0%</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The Unaffected Stock Price.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SunTrust Robinson Humphrey calculated a range of implied equity
values for Action Performance between $11.29 and $15.62&nbsp;per
share with an average implied equity value of $12.93&nbsp;per
share, based on the mean premium for the reference transactions.
SunTrust Robinson Humphrey calculated a range of implied equity
values for Action Performance between $10.74 and $15.37&nbsp;per
share with an average implied equity value of $12.49&nbsp;per
share, based on the median premium paid for the reference
transactions.
</DIV>

<P align="center" style="font-size: 10pt;">40

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Summary Valuation Analysis</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes the range of implied common stock
values per share for Action Performance based on the methods of
analysis described above.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weight.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>High</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Mean</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Avg.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Median</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Low</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Market Analysis of Selected Publicly Traded Reference
    Companies:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Analysis of Selected Merger and Acquisition Reference
    Transactions:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LTM Analysis&nbsp;&#151; Historical Results</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projections Analysis&nbsp;&#151; Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projections Analysis&nbsp;&#151; Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Discounted Cash Flow Analysis:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Base Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.41</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increased Competition Case</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.71</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Premiums Paid Analysis:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Based on Mean of Selected M&#38;A Transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Based on Median of Selected M&#38;A Transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.74</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Information Regarding SunTrust Robinson Humphrey</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance selected SunTrust Robinson Humphrey to act as
its financial advisor and render a fairness opinion regarding
the merger due to its reputation as a nationally recognized
investment banking firm with substantial experience in
transactions similar to the merger and because it is familiar
with Action Performance, its business and its industry. SunTrust
Robinson Humphrey is continually engaged in the valuation of
businesses and their securities in connection with mergers and
acquisitions, leveraged buyouts, negotiated underwritings,
secondary distributions of listed and unlisted securities and
private placements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance has agreed to pay SunTrust Robinson Humphrey
customary fees for its opinion and financial advisory services
in relation to the merger. Action Performance has agreed to pay
SunTrust Robinson Humphrey an opinion fee of $350,000 upon
delivery of its fairness opinion. In addition, Action
Performance has agreed to pay SunTrust Robinson Humphrey a
financial advisory fee of approximately $1.7&nbsp;million no
later than the closing of the merger. In addition, Action
Performance has agreed to reimburse SunTrust Robinson Humphrey
for its reasonable out-of-pocket expenses, subject to certain
limitations, and to indemnify SunTrust Robinson Humphrey and
certain related persons against certain liabilities arising out
of or in conjunction with its rendering of services under its
engagement, including certain liabilities under the federal
securities laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the ordinary course of its business, SunTrust Robinson
Humphrey may actively trade in the securities of Action
Performance for its own account and the accounts of its
customers and, accordingly, may at any time hold a long or short
position in such securities. In addition, SunTrust Robinson
Humphrey and its affiliates (including SunTrust Banks, Inc. and
its subsidiaries) may have other financing and business
relationships with Action Performance, ISC and SMI in the
ordinary course of business.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='119'></A>
</DIV>

<!-- link1 "Payment of Consideration" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Payment of Consideration</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The total amount of funds necessary to consummate the merger and
the related transactions is anticipated to be approximately
$253.3&nbsp;million, consisting of (i)&nbsp;approximately
<B>$</B>242.7&nbsp;million to pay Action
</DIV>

<P align="center" style="font-size: 10pt;">41

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
Performance&#146;s stockholders and $3.1&nbsp;million to pay the
holders of options and warrants to purchase common stock of
Action Performance, and (ii)&nbsp;approximately
$7.5&nbsp;million to pay related fees and expenses in connection
with the merger, including the change of control payments
described in this proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC has represented to Action Performance that it has
sufficient cash on hand, or commitments from its owners, ISC and
SMI, to pay the aggregate merger consideration. In addition, ISC
and SMI have severally (but not jointly) guaranteed all
obligations of SMISC and Motorsports Authentics through the
closing date under the merger agreement, including the
obligation to pay such consideration. Accordingly, the
transactions contemplated by the merger agreement are not
contingent upon SMISC&#146;s receipt of third party financing.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='120'></A>
</DIV>

<!-- link1 "Interests of Action Performance Directors and Executive Officers in the Merger" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Interests of Action Performance Directors and Executive
Officers in the Merger</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In considering the recommendations of our board of directors,
you should be aware that certain executive officers and
directors of Action Performance have interests in the
transaction that are different from, or are in addition to, your
interests as a shareholder.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Interests Relating to Employment and Service as an Officer
    After the Merger</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the merger, the directors of Motorsports Authentics
immediately prior to the effective time of the merger will be
the initial directors of the surviving corporation of the
merger, until their successors are duly elected and qualified or
until their earlier resignation or removal. It is expected,
however, that the current executive officers of Action
Performance immediately prior to the effective time of the
merger will remain the executive officers of the surviving
corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and
qualified.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Change of Control Arrangements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The parties agree that the merger will constitute a &#147;change
of control&#148; for purposes of the change of control
provisions in the employment or change of control agreements
with certain of Action Performance&#146;s executive officers,
and will result in a change of position or duties with respect
to such executive officers. Accordingly, such executive officers
will be entitled to receive severance payments under such
agreements in the event such executive officers resign or are
terminated in connection with the consummation of the merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the amount of potential cash severance
payable to Action Performance&#146;s current executive officers,
pursuant to the change of control provisions in their individual
agreements.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Current Executive Officers</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount of Potential Cash Severance Payment(1)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Herbert M. Baum</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>360,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fred W. Wagenhals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,240,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Melodee L. Volosin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>840,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David M. Riddiford</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>700,000</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Excludes the value of certain continued health and other
    benefits, if any.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Action Performance Stock Options and Warrants Prior to the
    Merger</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All outstanding options and warrants to acquire Action
Performance common stock, including the options held by the
directors and executive officers of Action Performance, will
become fully vested and immediately exercisable (whether or not
then vested or subject to any performance condition that has not
been satisfied) at the effective time of the merger. At the
effective time of the merger, any option or warrant not
exercised will be canceled, and the holder thereof will be
entitled to receive a cash payment equal to $13.00, without
interest, multiplied by the number of shares subject to the
options or warrants, less the aggregate exercise prices of the
options and warrants and less applicable taxes required to be
withheld. Any options or warrants with an exercise price equal
to or greater than $13.00&nbsp;per share will be canceled
without the right to receive any cash payment.
</DIV>

<P align="center" style="font-size: 10pt;">42

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth, as of September&nbsp;20, 2005,
for each of Action Performance&#146;s directors and executive
officers, (a)&nbsp;the number of shares underlying vested
options for Action Performance common stock with a per share
exercise price of less than $13.00, (b)&nbsp;the value of such
vested options, calculated by multiplying (i)&nbsp;the excess of
$13.00 over the per share exercise price of the option by
(ii)&nbsp;the number of shares underlying the option, and
without regard to deductions for income taxes and other
withholding, (c)&nbsp;the number of unvested options with a per
share exercise price of less than $13.00 that will vest upon the
effectiveness of the merger, (d)&nbsp;the value of such unvested
options, calculated by multiplying (i)&nbsp;the excess of $13.00
over the per share exercise price of the option by (ii)&nbsp;the
number of shares underlying the option, and without regard to
deductions for income taxes and other withholding, (e)&nbsp;the
aggregate number of shares underlying vested and unvested
options with a per share exercise price of less than $13.00 and
(f)&nbsp;the aggregate value of all such vested and unvested
options, calculated by multiplying (i)&nbsp;the excess of $13.00
over the per share exercise price of the option by (ii)&nbsp;the
number of shares underlying the option, and without regard to
deductions for income taxes and other withholding.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Unvested Options that</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Will Vest After</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;15, 2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>and/or as a Result of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Vested Options</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>the Merger</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Totals</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Directors and Executive</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(a)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(b)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(c)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(d)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(e)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(f)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Officers Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Herbert M. Baum</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>261,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>261,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fred W. Wagenhals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>900,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>900,912</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Melodee L. Volosin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>577,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>628,672</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David M. Riddiford</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>282,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Michael L. Gallagher</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Roy A. Herberger,&nbsp;Jr.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Anne L. Mariucci</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Robert L. Matthews</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Lowell L. Robertson</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>All directors and executive officers as a group (9
    persons)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,909,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>239,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>446,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,148,834</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indemnification and Insurance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that SMISC will cause the
surviving corporation to (i)&nbsp;assume all of Action
Performance&#146;s obligations with respect to all rights to
indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the effective time of the
merger in favor of the current or former directors or officers
of Action Performance, as provided in Action Performance&#146;s
articles of incorporation, bylaws or any indemnification
agreement between such directors or officers and Action
Performance (in each case, as in effect on August&nbsp;29,
2005), (ii)&nbsp;to the extent not advanced by applicable
insurance carriers, advance funds for expenses (including
reasonable attorney&#146;s fees) incurred by a current or former
director of Action Performance in defending a civil or criminal
action, suit or proceeding relating to the indemnification
obligations referenced in the immediately preceding clause in
advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall be ultimately
determined that he or she is not entitled to the indemnification
referenced in the immediately preceding clause, and
(iii)&nbsp;for six years after consummation of the merger,
maintain in effect insurance coverage similar to Action
Performance&#146;s current directors and officers insurance
policy for its current or former directors and officers for
events occurring prior to the consummation of the merger. See
&#147;Terms of the Merger Agreement&nbsp;&#151; Indemnification
and Insurance of Action Performance Directors and Officers.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">43

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='121'></A>
</DIV>

<!-- link1 "Federal Regulatory Matters" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Federal Regulatory Matters</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The HSR Act, and the rules and regulations promulgated
thereunder, require that SMISC, or its ultimate parent entity or
entities, and Action Performance file notification and report
forms with respect to the merger and related transactions with
the Antitrust Division of the United States Department of
Justice and the Federal Trade Commission. The parties thereafter
are required to observe a waiting period before consummating the
merger. The required notification and report forms were filed
with the Antitrust Division of the United States Department of
Justice and the Federal Trade Commission on September&nbsp;20,
2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At any time before or after the consummation of the merger, the
Antitrust Division of the United States Department of Justice or
the Federal Trade Commission or any state could take such action
under the antitrust laws as it deems necessary or desirable in
the public interest, including seeking to enjoin the
consummation of the merger, to rescind the merger or to seek
divestiture of particular assets. Private parties also may seek
to take legal action under the antitrust laws under certain
circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='122'></A>
</DIV>

<!-- link1 "Material U.S. Federal Income Tax Consequences" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Material U.S.&nbsp;Federal Income Tax Consequences</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of the material U.S.&nbsp;federal
income tax consequences of the merger to U.S.&nbsp;holders of
Action Performance common stock whose shares of Action
Performance common stock are converted into the right to receive
cash in the merger, as well as the material U.S.&nbsp;federal
income tax consequences of the merger to Action Performance,
SMISC and Motorsports Authentics. Non-U.S.&nbsp;holders of
Action Performance common stock may have different tax
consequences than those described below and are urged to consult
their tax advisors regarding the tax treatment of the merger to
them under U.S. and non-U.S.&nbsp;tax laws. This summary is
based on the Internal Revenue Code of 1986, as amended, referred
to as the &#147;Code&#148; in this proxy statement, applicable
proposed and current Treasury regulations promulgated under the
Code, administrative rulings and practice and judicial
authority, all as of the date of this proxy statement. All of
these authorities are subject to change, possibly with
retroactive effect so as to result in tax consequences different
from those described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of this summary, the term
&#147;U.S.&nbsp;holder&#148; means a beneficial owner of Action
Performance common stock that is:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a citizen or individual resident of the U.S.&nbsp;for
    U.S.&nbsp;federal income tax purposes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a corporation, or other entity taxable as a corporation for
    U.S.&nbsp;federal income tax purposes, created or organized in
    or under the laws of the U.S.&nbsp;or any State or the District
    of Columbia;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a trust if it (1)&nbsp;is subject to the primary supervision of
    a court within the U.S. and one or more U.S.&nbsp;persons have
    the authority to control all substantial decisions of the trust
    or (2) has a valid election in effect under applicable
    U.S.&nbsp;Treasury Regulations to be treated as a
    U.S.&nbsp;person;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an estate, the income of which is subject to U.S.&nbsp;federal
    income tax regardless of its source.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The U.S.&nbsp;federal income taxes of a partner in a partnership
holding Action Performance common stock will depend on the
status of the partner and the activities of the partnership.
Partners in a partnership holding shares of Action Performance
common stock should consult their own tax advisors. This summary
does not address all of the U.S.&nbsp;federal income tax
consequences that may be applicable to a particular
U.S.&nbsp;holder of Action Performance common stock. In
addition, this summary does not address the U.S.&nbsp;federal
income tax consequences of the merger to U.S.&nbsp;holders of
Action Performance common stock who are subject to special
treatment under U.S.&nbsp;federal income tax law, including, for
example:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    banks and other financial institutions, insurance companies,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    tax-exempt investors,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    S&nbsp;corporations, mutual funds,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders that are properly classified as
    &#147;partnerships&#148; or other pass-through entities under
    the Code,</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">44

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    dealers in securities or foreign currencies,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders who hold their common stock as part of a
    hedge, wash sale, constructive sale, straddle or conversion
    transaction,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders who acquired common stock through the exercise
    of employee stock options or other compensatory arrangements,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders who hold (actually or constructively) an
    equity interest in the surviving corporation after the merger,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders whose shares of common stock constitute
    qualified small business stock within the meaning of
    Section&nbsp;1202 of the Code,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders who are subject to the alternative minimum tax
    provisions of the Code,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    U.S.&nbsp;holders who do not hold their shares of Action
    Performance common stock as &#147;capital assets&#148; within
    the meaning of Section&nbsp;1221 of the Code (generally,
    property held for investment).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
This summary does not address the U.S.&nbsp;federal income tax
consequences to any Action Performance shareholder who, for
U.S.&nbsp;federal income tax purposes, is a nonresident alien
individual, a foreign corporation, a foreign partnership or a
foreign estate or trust and this summary does not address the
tax consequences of the merger to any U.S.&nbsp;holder under
state, local or foreign tax laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>This summary is provided for general information purposes
only and is not intended as a substitute for individual tax
advice. Each holder of Action Performance common stock should
consult its own tax advisors as to the particular tax
consequences of the merger to such holder, including the
application and effect of any state, local, foreign or other tax
laws and the possible effect of changes to such laws.</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Receipt of Cash for Common Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, the merger will be a taxable transaction to
U.S.&nbsp;holders of Action Performance common stock for
U.S.&nbsp;federal income tax purposes. A U.S.&nbsp;holder of
Action Performance common stock receiving cash in the merger
will recognize gain or loss for U.S.&nbsp;federal income tax
purposes in an amount equal to the difference between the amount
of cash received in exchange for such common stock and the
U.S.&nbsp;holder&#146;s adjusted tax basis in the Action
Performance common stock surrendered. Any such gain or loss
generally will be capital gain or loss if the Action Performance
common stock is held as a capital asset at the effective time of
the merger. Any capital gain or loss will be taxed as long-term
capital gain or loss if the U.S.&nbsp;holder has held the Action
Performance common stock for more than one year as of the
effective time of the merger. If the U.S.&nbsp;holder has held
the Action Performance common stock for one year or less as of
the effective time of the merger, any capital gain or loss will
be taxed as short-term capital gain or loss. The deductibility
of a capital loss recognized on the exchange is subject to
certain limitations. Certain U.S.&nbsp;holders, including
individuals, are eligible for preferential rates of
U.S.&nbsp;federal income tax in respect of long-term capital
gains. If you acquired different blocks of our common stock at
different times or at different prices, you must calculate your
gain or loss and determine your adjusted tax basis and holding
period separately with respect to each block of our common stock.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Backup Withholding and Information Reporting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A U.S.&nbsp;holder of Action Performance common stock may be
subject to information reporting on the cash received in the
merger unless an exemption applies. Also, cash payments to which
a U.S.&nbsp;holder of Action Performance common stock is
entitled pursuant to the merger agreement will be subject to the
federal backup withholding tax at the applicable rate unless the
U.S.&nbsp;holder provides proof of an applicable exemption, or
provides its taxpayer identification number (social security
number in the case of an individual or employer identification
number in the case of other holders), certifies under penalties
of perjury that such number is correct, that no backup
withholding is otherwise required, and that the U.S.&nbsp;holder
is a U.S.&nbsp;person and otherwise complies with such backup
withholding rules. Each U.S.&nbsp;holder of Action Performance
common stock should complete, sign and return to the paying
agent the Substitute Form&nbsp;W-9 in order to provide the
</DIV>

<P align="center" style="font-size: 10pt;">45

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<DIV align="left" style="font-size: 10pt;">
information and certification necessary to avoid backup
withholding, unless an exemption otherwise applies and is
satisfied in a manner satisfactory to the paying agent. The
Substitute Form&nbsp;W-9 will be included as part of the letter
of transmittal mailed to each record holder of Action
Performance common stock (see &#147;Terms of the Merger
Agreement&nbsp;&#151; Payment for Action Performance Common
Stock in the Merger&#148; beginning on page&nbsp;48). Backup
withholding is not an additional tax and any amounts withheld
under the backup withholding rules may be refunded or credited
against your U.S.&nbsp;federal income tax liability, if any,
provided that you furnish the required information to the
Internal Revenue Service in a timely manner. Each
U.S.&nbsp;holder should consult its own tax advisor as to the
qualifications for exemption from backup withholding and the
procedures for obtaining such exemption.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Action Performance, SMISC and Motorsports
    Authentics</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger will not be a taxable event in which gain is
recognized by Action Performance, SMISC, Motorsports Authentics
or the surviving corporation for U.S.&nbsp;federal income tax
purposes.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='123'></A>
</DIV>

<!-- link1 "No Dissenters&#146; Rights" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>No Dissenters&#146; Rights</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Arizona law, shareholders of a corporation are not
entitled to exercise dissenters&#146; rights if shares of the
corporation are registered on a national securities exchange or
quoted on NASDAQ. Consequently, because shares of Action
Performance&#146;s common stock are registered on the NYSE, you
will not have the right to exercise dissenters&#146; rights. If
the merger agreement is approved and the merger is consummated,
shareholders who voted against the approval of the merger
agreement will be treated the same as shareholders who voted for
the approval of the merger agreement and their shares will
automatically be converted into the right to receive the merger
consideration.
</DIV>

<P align="center" style="font-size: 10pt;">46

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<DIV align="left" style="font-size: 10pt;">
<A name='125'></A>
</DIV>

<!-- link1 "TERMS OF THE MERGER AGREEMENT" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TERMS OF THE MERGER AGREEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of the material terms of the merger
agreement. This summary does not purport to describe all the
terms of the merger agreement and is qualified by reference to
the complete merger agreement which is attached as
Appendix&nbsp;A to this proxy statement. We urge you to read the
merger agreement carefully and in its entirety because it, and
not this proxy statement, is the legal document that governs the
merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The text of the merger agreement has been included to provide
you with information regarding its terms. The terms of the
merger agreement (such as the representations and warranties)
are intended to govern the contractual rights and relationships,
and allocate risks, between the parties in relation to the
merger. The merger agreement contains representations and
warranties that Action Performance, ISC, SMI, SMISC and
Motorsports Authentics made to each other as of specific dates.
The representations and warranties were negotiated between the
parties with the principal purpose of setting forth their
respective rights with respect to their obligations to
consummate the merger and may be subject to important
limitations and qualifications as set forth therein, including a
contractual standard of materiality different from that
generally applicable under federal securities laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, such representations and warranties are qualified
by information in confidential disclosure schedules that Action
Performance, ISC, SMI SMISC and Motorsports Authentics have
exchanged in connection with signing the merger agreement. While
none of Action Performance, ISC, SMI, SMISC nor Motorsports
Authentics believe that the disclosure schedules contain
information that the securities laws require to be publicly
disclosed, the disclosure schedules do contain information that
modifies, qualifies and creates exceptions to the
representations and warranties set forth in the attached merger
agreement. Accordingly, you should not rely on the
representations and warranties as characterizations of the
actual state of facts, since they are modified by the underlying
disclosure schedules. These disclosure schedules contain
information that has been included in Action Performance&#146;s
prior public disclosures, as well as potential additional
non-public information. Moreover, information concerning the
subject matter of the representations and warranties may have
changed since the date of the merger agreement, which subsequent
information may or may not be fully reflected in Action
Performance&#146; public disclosures.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='126'></A>
</DIV>

<!-- link1 "General: The Merger" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>General: The Merger</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the effective time of the merger, upon the terms and subject
to the conditions of the merger agreement and in accordance with
the Arizona Business Corporation Act, Motorsports Authentics
will merge with and into Action Performance and the separate
corporate existence of Motorsports Authentics will end. Action
Performance will be the surviving corporation of the merger and
will continue to be an Arizona corporation after the merger,
wholly-owned by SMISC. The articles of incorporation of Action
Performance, as the surviving corporation of the merger, will be
amended and restated in their entirety at the effective time of
the merger to read as set forth in the merger agreement and the
bylaws of Motorsports Authentics as in effect immediately prior
to the effective time, shall be the bylaws of the surviving
corporation. The name of the surviving corporation will be
Motorsports Authentics, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The initial directors of the surviving corporation shall be
Messrs.&nbsp;John R. Saunders, Mark M. Gambill, Marcus Smith and
Ms.&nbsp;Lesa France Kennedy, each of whom shall serve until the
earlier of their resignation, death or removal or until their
respective successors are duly elected or appointed and
qualified. Discussions regarding the proposed employment
arrangements among the surviving corporation and certain
executive officers of Action Performance are ongoing as of the
date of this proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='127'></A>
</DIV>

<!-- link1 "When the Merger Becomes Effective" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>When the Merger Becomes Effective</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance and Motorsports Authentics will file articles
of merger with the Arizona Corporation Commission on the closing
date of the merger, which will be no later than the second
business day following the satisfaction or waiver of all the
closing conditions to the merger (other than those conditions
that by their nature are to be satisfied at the closing), unless
Action Performance and SMISC agree to another date in writing.
The merger will become effective when the articles of merger are
filed with the Arizona Corporation
</DIV>

<P align="center" style="font-size: 10pt;">47

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<DIV align="left" style="font-size: 10pt;">
Commission or at such subsequent date and time as Action
Performance and SMISC agree upon and specify in the articles of
merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the shareholders of Action Performance approve the merger
agreement, the parties intend to consummate the merger as soon
as practicable thereafter. The parties to the merger agreement
expect to consummate the merger during our first fiscal quarter
ending December&nbsp;31, 2005. Because the merger is subject to
certain conditions, the exact timing of the merger cannot be
determined.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='128'></A>
</DIV>

<!-- link1 "Consideration to be Received Pursuant to the Merger; Treatment of Stock Options and Warrants" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consideration to be Received Pursuant to the Merger;
Treatment of Stock Options and Warrants</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that, at the effective time of the
merger:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each share of Action Performance common stock issued and
    outstanding immediately prior to the effective time of the
    merger will be canceled and converted automatically into the
    right to receive $13.00 in cash, without interest (other than
    (a)&nbsp;shares of Action Performance common stock owned by
    Action Performance as treasury shares, and (b)&nbsp;shares of
    Action Performance common stock owned by SMISC or Motorsports
    Authentics or any subsidiary of Motorsports Authentics), payable
    upon surrender of the certificate that formerly evidenced such
    shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each share of Action Performance common stock owned by Action
    Performance as a treasury share will be canceled and no payment
    or distribution will be paid in exchange for it;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each share of Action Performance common stock owned by SMISC,
    Motorsports Authentics or any subsidiary of Motorsports
    Authentics will be canceled and no payment or distribution will
    be paid in exchange for it; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each share of Motorsports Authentics common stock issued and
    outstanding immediately prior to the effective time of the
    merger will be converted into and become one validly issued,
    fully paid and nonassessable share of common stock, par value
    $0.01&nbsp;per share, of the surviving corporation of the
    merger, and each certificate evidencing ownership of Motorsports
    Authentics shares will evidence ownership of such share of the
    surviving corporation of the merger.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each option or warrant granted to any current employee,
consultant, advisor, independent contractor, officer or director
of Action Performance to acquire Action Performance common
stock, which is outstanding immediately prior to the effective
time of the merger, will become fully vested and exercisable
(whether or not then vested or subject to any performance
condition that has not been satisfied). At that time, any option
or warrant not exercised will be canceled, and the holder
thereof will be entitled to receive a single lump sum cash
payment (less any applicable income or employment taxes required
to be withheld) equal to $13.00 multiplied by the number of
shares subject to the options or warrants, less the aggregate
exercise prices of the options or warrants. Any options or
warrants with an exercise price greater than $13.00&nbsp;per
share will be canceled without any cash payment.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='129'></A>
</DIV>

<!-- link1 "Payment for Action Performance Common Stock in the Merger" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Payment for Action Performance Common Stock in the Merger</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the effective time of the merger, SMISC will deposit or will
cause to be deposited with a bank or trust company reasonably
acceptable to Action Performance, as paying agent, for the
benefit of the holders of Action Performance common stock,
options and warrants, sufficient cash to pay those holders the
amounts they are entitled to receive under the merger agreement.
Pending the exchange procedures, as described below, the paying
agent will invest the cash so deposited as directed by SMISC,
subject to certain limitations, and any net profit resulting
from, or interest or income produced by, such investments will
be payable to SMISC. After the effective time of the merger,
there will be no further transfers in the records of Action
Performance of certificates representing Action Performance
common stock and, if any certificates are presented to Action
Performance for transfer, they will be canceled against payment
of the merger consideration. After the effective time of the
merger, subject to the right to surrender your certificate in
exchange for payment of the merger consideration, you will cease
to have any rights as a shareholder of Action Performance.
</DIV>

<P align="center" style="font-size: 10pt;">48
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As promptly as practicable after the effective time of the
merger, the paying agent will mail to each record holder of
Action Performance common stock a letter of transmittal and
instructions for use in effecting the surrender of their Action
Performance common stock certificates in exchange for
$13.00&nbsp;per share in cash, without interest. You should not
send in your Action Performance common stock certificates until
you receive the letter of transmittal. If you have lost a
certificate, or if it has been stolen or destroyed, you will
have to provide an affidavit to that fact and, if required by
SMISC, post a bond in a reasonable amount as SMISC directs as
indemnity against any claim that may be made against SMISC with
respect to such certificate before the paying agent makes the
payment in connection with such certificate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The paying agent will promptly pay you your merger consideration
after you have surrendered your certificates to the paying agent
and provided to the paying agent any other items specified by
the letter of transmittal and instructions. The surrendered
certificates will be canceled upon delivery of the merger
consideration. Interest will not be paid or accrued in respect
of cash payments of merger consideration. SMISC or the paying
agent may reduce the amount of any merger consideration paid to
you by any applicable taxes that it is required to withhold.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If payment is to be made to a person other than the person in
whose name the Action Performance common stock certificate
surrendered is registered, it will be a condition of payment
that the certificate so surrendered be properly endorsed or
otherwise be in proper form for transfer and that the person
requesting such payment pay any transfer or other taxes required
by reason of the payment to a person other than the registered
holder of the certificate surrendered of the amount due under
the merger agreement, or that such person establish, to the
reasonable satisfaction of SMISC, that such tax has been paid or
is not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any portion of the payment fund held by the paying agent that
remains undistributed to our shareholders for six months after
the effective time of the merger will be delivered to SMISC, and
any shareholders who have not properly surrendered their stock
certificates will thereafter look only to SMISC for payment of
the merger consideration in the amount due to them under the
merger agreement. Any portion of the payment fund remaining
unclaimed by shareholders as of a date which is two years
following the effective time of the merger (or immediately prior
to any earlier date on which such amounts would otherwise
escheat to or become property of any governmental authority)
will, to the extent permitted by applicable law, become property
of SMISC, free and clear of any claims or interest of any person
previously entitled to it. None of the paying agent, SMISC or
the surviving corporation will be liable to any shareholder for
any merger consideration delivered to a public official pursuant
to applicable abandoned property, escheat and similar laws.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='130'></A>
</DIV>

<!-- link1 "Representations and Warranties" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Representations and Warranties</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance has made certain customary representations
and warranties in the merger agreement to SMISC and Motorsports
Authentics, including as to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    its corporate existence and power, qualification to conduct
    business and good standing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    capitalization;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    its corporate authority to enter into, and carry out the
    obligations under, the merger agreement and enforceability of
    the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    no conflicts and required filings and consents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    documents filed with the SEC and the accuracy of the information
    contained in those documents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    financial statements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    absence of undisclosed liabilities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    material accuracy of information supplied;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    absence of certain changes;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">49

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    legal actions and proceedings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    material contracts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    compliance with laws;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    environmental and safety matters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    employee benefit plans and labor matters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    tax matters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    real estate and other assets, including title to and leasehold
    interests in, or right to use, such assets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    intellectual property;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    required shareholder vote;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    board approvals;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    brokers and other advisory fees;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the opinion of SunTrust Robinson Humphrey;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    insurance.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain aspects of the representations and warranties of Action
Performance are qualified by the concept of &#147;material
adverse effect.&#148; For the purposes of the merger agreement,
a &#147;material adverse effect&#148; on Action Performance
means any event, occurrence, state of facts or development or
developments which individually or in the aggregate would
reasonably be expected to result in any change or effect, that
(i)&nbsp;is materially adverse to the business, properties,
assets (including license agreements), liabilities (contingent
or otherwise), financial condition or results of operations of
Action Performance and its subsidiaries, taken as a whole, or
(ii)&nbsp;would reasonably be expected to prevent or materially
impede, interfere with, hinder or delay the consummation by
Action Performance of the merger or the other transactions
contemplated by this Agreement. Notwithstanding the foregoing,
to the extent any event, occurrence, state of facts or
development arises out of or relates to any of the following, it
shall not be taken into account in determining whether there has
been a &#147;material adverse effect&#148; on Action Performance:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    general economic conditions in the United States of America or
    conditions generally affecting industries in which Action
    Performance or its subsidiaries operate (except if the event,
    change, effect, development, condition or occurrence
    disproportionately impacts the business, assets or financial
    condition of Action Performance and its subsidiaries, taken as a
    whole);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the public announcement of the merger agreement or the
    consummation of the transactions contemplated by the merger
    agreement (including, without limitation, any loss of customers,
    employees, suppliers, licensees or distributors of Action
    Performance and any subsidiary as a result thereof, or changes
    arising out of, or attributable to, any such loss);&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    conditions specifically identified in Action Performance&#146;s
    filed SEC documents the effect of which is reasonably
    determinable from the information contained therein.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, any change in Action Performance&#146;s stock price
or trading volume or any failure, in and of itself, of Action
Performance to meet its internal financial projections or
published analysts&#146; forecasts relating to it, or any other
amount of revenues or earnings of Action Performance, will not,
individually or collectively, be deemed to constitute a material
adverse effect (although the circumstances giving rise to any
such failure may constitute a material adverse effect).
</DIV>

<P align="center" style="font-size: 10pt;">50

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of ISC, SMI, SMISC and Motorsports Authentics has made
certain representations and warranties in the merger agreement
to Action Performance, including as to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    corporate existence and power, qualification to conduct business
    and good standing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    corporate authority to enter into, and carry out the obligations
    under, the merger agreement and enforceability of the merger
    agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    no conflicts and required filings and consents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    absence of litigation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    material accuracy of information supplied;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Motorsports Authentics&#146; operations;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    capital resources to pay the merger consideration.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The representations and warranties contained in the merger
agreement do not survive the termination of the agreement or the
closing of the merger, except that the representation by Action
Performance regarding brokers and advisory fees shall survive
the termination of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='131'></A>
</DIV>

<!-- link1 "Agreements Relating to Action Performance&#146;s Interim Operations" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Agreements Relating to Action Performance&#146;s Interim
Operations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance has agreed that, until the consummation of
the merger, Action Performance and its subsidiaries will carry
on their businesses in the ordinary course consistent with past
practice and in material compliance with all applicable laws,
and use all commercially reasonable efforts to preserve intact
their current business organizations, keep available the
services of their current officers, employees and consultants
and preserve their relationships with customers, suppliers,
licensors, licensees, distributors and others.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Action Performance has agreed, with certain
exceptions, that neither it nor any of its subsidiaries will,
prior to the consummation of the merger, do any of the following
without the prior written consent of SMISC:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    declare, set aside or pay any dividends on, or make any other
    distributions (whether in cash, stock or property) in respect
    of, any of its capital stock, other than dividends or
    distributions by a direct or indirect wholly owned subsidiary of
    Action Performance to its parent;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    split, combine or reclassify its capital stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    issue or authorize the issuance of any securities in respect of,
    in lieu of or in substitution for, shares of its capital stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    purchase, redeem or otherwise acquire any shares of its capital
    stock or any other securities of Action Performance or its
    subsidiaries or any rights, warrants or options to acquire any
    such shares or other securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    issue, deliver, sell, grant, amend the terms of, reprice, pledge
    or otherwise encumber or subject to any lien, any shares of its
    or its subsidiaries&#146; capital stock, any other voting
    securities or any securities convertible into, or any rights,
    warrants or options to acquire, any such shares, voting
    securities or convertible securities, or any &#147;phantom
    stock,&#148; &#147;phantom&#148; stock rights, stock
    appreciation rights or stock based performance units, other than
    issuances of common stock of Action Performance upon the
    exercise of stock options or warrants outstanding on the date of
    the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    amend its articles of incorporation or bylaws or other
    comparable charter or organizational documents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    make any change in the number of shares of its capital stock
    authorized, issued or outstanding (other than issuances of
    shares in connection with the exercise of Action Performance
    stock options or warrants outstanding on the date of the merger
    agreement) or grant or accelerate the exercisability of any
    option, warrant or other right to purchase shares of its capital
    stock, other than in the case of</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">51

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    options, acceleration in accordance with the terms of such
    options in effect as of the date of the merger agreement in
    connection with the transactions contemplated by the merger
    agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    directly or indirectly acquire, by merging or consolidating
    with, or by purchasing assets of, or by any other manner, any
    person or division, business or equity interest of any person or
    any asset or assets that are material to Action Performance and
    its subsidiaries, taken as a whole, except purchases of
    components, raw materials or supplies in the ordinary course of
    business consistent with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sell, lease, license, mortgage, sell and leaseback or otherwise
    encumber or subject to any lien or otherwise dispose of any of
    its material properties or other assets or any interests therein
    (including securitizations), except for sales of inventory and
    used equipment in the ordinary course of business consistent
    with past practice or pursuant to contracts or agreements in
    effect as of the date of the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into, modify, renew, extend or amend any lease of material
    property, except for modifications or amendments that are not
    adverse to Action Performance and its subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    incur or guarantee any indebtedness for borrowed money (other
    than under or in connection with Action Performance&#146;s
    existing facilities);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    issue or sell any debt securities or calls, options, warrants or
    other rights to acquire any debt securities of Action
    Performance or any of its subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into any &#147;keep well&#148; or other agreement to
    maintain any financial statement condition of another person;
    enter into any arrangement having the economic effect of any of
    the foregoing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    make any loans, advances or capital contributions to, or
    investments in, any other person, other than to or in Action
    Performance or any direct or indirect wholly owned subsidiary of
    Action Performance or to employees in respect of travel expenses
    in the ordinary course of business consistent with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    make any new capital expenditure in excess of $100,000
    individually or $250,000 in the aggregate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    pay, discharge, settle or satisfy any claims, liabilities,
    obligations or litigation, other than any such payment,
    discharge, settlement or satisfaction in the ordinary course of
    business consistent with past practice or in accordance with
    their terms of liabilities disclosed, reflected or reserved
    against in the most recent audited financial statements (or the
    notes thereto) of Action Performance included in its SEC
    documents (for amounts not in excess of such reserves) or
    incurred since the date of such financial statements in the
    ordinary course of business consistent with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cancel any material note or account receivable or discount in
    any material respect any material account receivable, or waive
    or assign any claims or rights of substantial value, or waive
    any benefits of, or agree to modify in any respect, or, subject
    to the other terms of the merger agreement, fail to enforce, or
    consent to any matter with respect to which consent is required
    under, any standstill agreement or material confidentiality
    agreement or similar agreement to which Action Performance or
    any of its subsidiaries is a party;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into any contracts (including any license agreements, but
    excluding confidentiality agreements containing customary terms
    which do not impose any obligations on Action Performance or its
    subsidiaries other than those relating to the treatment of
    confidential information) relating to the license, marketing,
    co-promotion, manufacturing, research, development,
    distribution, training, sale or supply by third parties of
    products of Action Performance or any of its subsidiaries or
    products licensed by Action Performance or any of its
    subsidiaries which, individually, has aggregate future payment
    or other obligations with a value in excess of $100,000, or, in
    the aggregate, have future payment or other obligations with a
    value in excess of $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into, modify, amend or terminate any contract or waive,
    release or assign any material rights or claims thereunder,
    which if so entered into, modified, amended, terminated, waived,
    released or assigned would reasonably be expected to have a
    material adverse effect, impair in any material respect</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">52

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    the ability of Action Performance to perform its obligations
    under the merger agreement or prevent or materially delay the
    consummation of the transactions contemplated by the merger
    agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into any contract with a value, individually or together
    with all contracts entered into after the date of the merger
    agreement, in excess of $100,000 to the extent consummation of
    the transactions contemplated by the merger agreement or
    compliance by Action Performance with the provisions of the
    merger agreement would reasonably be expected to conflict with,
    or result in a violation or breach of, or default (with or
    without notice or lapse of time, or both) under, or give rise to
    a right of, or result in, termination, cancellation or
    acceleration of any obligation or to the loss of a benefit
    under, or result in the creation of any lien in or upon any of
    the properties or other assets of Action Performance or any of
    its subsidiaries under, or give rise to any increased,
    additional, accelerated, or guaranteed right or entitlements of
    any third party under, or result in any material alteration of,
    any provision of such contract, or containing any restriction on
    the ability of Action Performance or any of its subsidiaries to
    assign its rights, interests or obligations under such contract,
    unless such restriction expressly excludes any assignment to
    SMISC or any of its subsidiaries in connection with or following
    the consummation of the merger and the other transactions
    contemplated by the merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sell, transfer or license to any person or otherwise extend,
    amend or modify any of its material intellectual property
    rights, other then in the ordinary course of business consistent
    with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    except as set forth in the merger agreement,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    adopt, enter into, terminate or amend any company benefit plan
    or agreement or other material agreement, plan or policy
    involving Action Performance or any of its subsidiaries and one
    or more of their respective current or former directors,
    officers, employees or consultants,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increase in any manner the compensation, bonus or fringe or
    other benefits of (including severance or termination pay), or
    pay any bonus of any kind or amount whatsoever to, any current
    or former director, officer, employee or consultant, other than
    normal increases in compensation to non-executive employees
    consistent with past practice,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    pay any benefit or amount not required under any company benefit
    plan or agreement in effect on the date of the merger agreement
    other than the payment of compensation and severance in the
    ordinary course of business consistent with past practice,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increase the severance or termination pay of any current or
    former director, officer, employee or consultant,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    grant, amend, reprice or remove any restrictions on any stock
    options, warrants, &#147;phantom&#148; stock, stock appreciation
    rights, &#147;phantom&#148; stock rights, stock based or stock
    related awards, performance units or restricted stock,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    amend the terms of any bonus, incentive, performance or other
    compensation plan or arrangement, company benefit agreement or
    plan, other than in the ordinary course of business consistent
    with past practice,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    amend or modify any option or warrant to purchase Action
    Performance capital stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    take any action to fund or in any other way secure the payment
    of compensation or benefits under any employee plan, agreement,
    contract or arrangement or company benefit plan or agreement,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    take any action to reprice or accelerate the vesting or payment
    of any compensation or benefit under any company benefit plan or
    agreement,&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    materially change any actuarial or other assumption in
    connection with any pension plan, or change the manner in which
    contributions are made thereto or the basis on which such
    contributions are determined;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    revalue any material assets of Action Performance or any of its
    subsidiaries or make any change in accounting methods,
    principles or practices, other than any such changes required to
    comply with</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">53

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    GAAP or applicable law and with respect to which Action
    Performance has notified and consulted with SMISC prior to its
    implementation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into or modify any related party transaction;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    authorize any of, or commit, resolve, propose or agree to take
    any of, the foregoing actions, or, except as permitted in the
    merger agreement, take any action that would, or that would
    reasonably be expected to, result in any of the conditions to
    the merger not being satisfied.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
<A name='132'></A>
</DIV>

<!-- link1 "No Solicitation of Competing Proposals" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>No Solicitation of Competing Proposals</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that, until the effective time of
the merger or the termination of the merger agreement, neither
Action Performance nor any of its subsidiaries will, whether
directly or indirectly through its directors, officers,
employees, investment bankers, financial advisers, attorneys,
accountants or other advisors, agents or representatives, do any
of the following, or authorize or permit any of the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    solicit, initiate or encourage, or knowingly take any other
    action designed to, or which could be reasonable expected to,
    facilitate, any inquiries or the making of any proposal that
    constitutes, or could reasonably be expected to lead to, a
    &#147;takeover proposal&#148; (as defined below);&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into, continue or otherwise participate in any discussions
    or negotiations regarding, or furnish to any person any
    information or knowingly cooperate with respect to, any takeover
    proposal.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
However, Action Performance or its board of directors (or any
committee thereof) may, prior to obtaining the approval of the
Action Performance shareholders to the merger, take any of the
actions described in the second bullet point of the prior
paragraph if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance has received an unsolicited <I>bona fide
    </I>written takeover proposal from a third party after the date
    of the merger agreement that did not result from a breach of
    Action Performance&#146;s obligations described above;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the board of directors (a)&nbsp;has determined in good faith,
    after consultation with its outside legal counsel and a
    financial advisor of nationally recognized reputation, that such
    takeover proposal constitutes or is reasonably likely to lead to
    a &#147;superior proposal&#148; (as defined below), and
    (b)&nbsp;has determined in good faith after consultation with
    its outside legal counsel that it is required to do so in order
    to comply with its fiduciary duties to its shareholders under
    applicable law;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the board of directors has notified SMISC of the takeover
    proposal and has received from the third party an executed
    confidentiality agreement with terms not less restrictive to the
    third party than those contained in the confidentiality
    agreement executed by SMISC on June&nbsp;17, 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement further provides that Action Performance
will, and will cause its subsidiaries to, immediately cease and
cause to be terminated all existing discussions or negotiations
with any persons conducted before the date of the merger
agreement with respect to any takeover proposal and to request
that any such persons promptly return or destroy all
confidential information furnished to such person before the
date of the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the merger agreement, Action Performance must promptly,
and in any event within two business days after receipt, advise
SMISC orally and in writing of any takeover proposal or any
inquiry with respect to or that could reasonably be expected to
lead to any takeover proposal, the material terms and conditions
of any such takeover proposal or inquiry (including any changes
thereto) and the identity of the person or entity making such
takeover proposal or inquiry. Action Performance is required to
inform SMISC of the status and details of any such takeover
proposal or inquiry, including any changes to the terms thereof,
and is not permitted to enter into any confidentiality agreement
which would prohibit it from providing such information to
SMISC. Action Performance is required, as soon as practicable
after the receipt or delivery thereof, to provide to SMISC
copies of all relevant portions of correspondence and other
material sent or provided to Action Performance from any person
that describes any of the terms or conditions of any takeover
proposal, as
</DIV>

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<DIV align="left" style="font-size: 10pt;">
well as copies of all non-public information subsequently
provided by Action Performance or any of its subsidiaries in
connection with any takeover proposal or inquiry that SMISC was
not previously provided.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of the merger agreement, the term &#147;takeover
proposal&#148; means any inquiry, proposal or offer from any
person other than SMISC relating to or that could reasonably be
expected to lead to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any direct or indirect acquisition or purchase in one
    transaction or a series of transactions, of (i)&nbsp;assets or
    businesses that constitute 15% or more of the revenues, net
    income or the fair market value of the assets of Action
    Performance and its subsidiaries, taken as a whole or
    (ii)&nbsp;15% or more of any class of equity securities of
    Action Performance or any of its subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any tender offer or exchange offer that if consummated would
    result in any person beneficially owning 15% or more of any
    class of equity securities of Action Performance or any of its
    subsidiaries;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any merger, consolidation, business combination,
    recapitalization, liquidation, dissolution, joint venture,
    binding share exchange or similar transaction involving Action
    Performance or any of its subsidiaries pursuant to which any
    person or the shareholders of any person would own 15% or more
    of any class of equity securities of Action Performance or any
    of its subsidiaries or of any resulting parent company of Action
    Performance.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of the merger agreement, the term &#147;superior
proposal&#148; means any <I>bona fide </I>offer made by a third
party which:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    if consummated, would result in such person (or its
    shareholders) owning, directly or indirectly, all or
    substantially all of the shares of common stock of Action
    Performance then outstanding (or of the surviving entity in a
    merger or the direct or indirect parent of the surviving entity
    in a merger) or all or substantially all the assets of Action
    Performance;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance&#146;s board of directors determines in good
    faith (after consultation with a financial advisor of nationally
    recognized reputation) to be</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    more favorable to Action Performance&#146;s shareholders from a
    financial point of view than the merger agreement (taking into
    account all of the terms and conditions of such proposal and the
    merger agreement including any changes to the financial terms of
    the merger agreement with SMISC and Motorsports Authentics
    proposed by SMISC in response thereto);&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reasonably capable of being completed, taking into account all
    legal, financial, regulatory, and other aspects of such proposal.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
<A name='133'></A>
</DIV>

<!-- link1 "Special Meeting of Action Performance Shareholders; Recommendation of Our Board of Directors" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Special Meeting of Action Performance Shareholders;
Recommendation of Our Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that Action Performance, as soon
as practicable following the date of the merger agreement, will
establish a record date for, duly call, give notice of, convene
and hold a special meeting of its shareholders for the purpose
of obtaining its shareholders&#146; approval of the merger
agreement. The merger agreement further provides that, except in
the circumstances described below, our board of directors must
recommend approval of the merger agreement by Action
Performance&#146;s shareholders, including in this proxy
statement. The merger agreement prohibits our board of directors
(or any committee thereof) from:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
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    <TD width="96%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    withdrawing or modifying in a manner adverse to SMISC, or
    proposing to withdraw or modify in a manner adverse to SMISC,
    such recommendation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    recommending, adopting or approving, or proposing to recommend,
    adopt or approve, any alternative transaction;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    approving or recommending, or proposing to approve or recommend,
    or allowing Action Performance or any of its subsidiaries to
    execute or enter into any letter of intent, memorandum of
    understanding, agreement in principle, merger agreement,
    acquisition agreement, option agreement, joint venture
    agreement, partnership agreement or similar agreement
    constituting or relating to, or that is intended</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">55

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    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    to or could reasonably be expected to lead to, any alternative
    transaction, other than a permitted confidentiality agreement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If prior to the special meeting of shareholders, Action
Performance receives a proposal for an alternative transaction,
SMISC may request that our board of directors publicly reaffirm
its recommendation relating to the merger agreement within five
business days following such request, unless the board
withdraws, modifies or changes its recommendation of the merger
agreement in a manner provided for in the merger agreement, as
described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that our board of directors may
withdraw or modify in a manner adverse to SMISC its
recommendation before obtaining the approval of the Action
Performance shareholders in response to the receipt of an
unsolicited <I>bona fide </I>alternative transaction proposal
made after the date of the merger agreement if it:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    determines in good faith (after consultation with its outside
    counsel and a financial advisor of nationally recognized
    reputation) that such alternative transaction proposal is a
    superior proposal in accordance with the terms of the merger
    agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    determines in good faith (after consultation with its outside
    counsel) that it is required to do so in order to comply with
    its fiduciary duties to the Action Performance shareholders
    under applicable law;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    is not otherwise in violation of the nonsolicitation provisions
    of the merger agreement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
The board of directors may not change its recommendation,
however, unless Action Performance has provided notice to SMISC
within two business days of its receipt of such superior
proposal advising SMISC of such superior proposal, specifying
the material terms and conditions of such superior proposal and
identifying the person making such superior proposal; and
(ii)&nbsp;taken into account any changes to the financial terms
of the merger agreement proposed by SMISC in response to such
superior proposal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Even if our board of directors withdraws or modifies in a manner
adverse to SMISC its recommendation of the merger as described
above, or publicly proposes to do so, we are still required to
submit the merger agreement to Action Performance&#146;s
shareholders for their consideration at the special meeting,
unless the merger agreement is otherwise terminated. See
&#147;&#151;&nbsp;Termination of the Merger Agreement&#148; for
a description of each party&#146;s ability to terminate the
merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Nothing in the merger agreement will prohibit Action Performance
from taking and disclosing to Action Performance&#146;s
shareholders a position with respect to a tender or exchange
offer by a third party pursuant to Rule&nbsp;14e-2(a) under the
Exchange Act or making any required disclosure to the
shareholders of Action Performance if, in the good faith
judgment of the board of directors, failure to so disclose would
constitute a violation of law. However, neither Action
Performance nor its board of directors (nor any committee
thereof) may recommend that the shareholders of Action
Performance tender their shares in connection with any such
tender or exchange offer (or otherwise approve or recommend any
alternative transaction proposal) or withdraw or modify in a
manner adverse to SMISC the board of directors&#146;
recommendation relating to the merger agreement in a manner
inconsistent with the requirements of the merger agreement, or
otherwise take, agree or resolve to take, any prohibited actions
relating to the board of directors&#146; change in
recommendation under the merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='134'></A>
</DIV>

<!-- link1 "Indemnification and Insurance of Action Performance Directors and Officers" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Indemnification and Insurance of Action Performance Directors
and Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that SMISC shall, to the fullest
extent permitted by law, cause the surviving corporation to
assume, as of the effective time, all of Action
Performance&#146;s obligations with respect to all rights to
indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the effective time of the
merger in favor of the current or former directors or officers
of Action Performance, as provided in its articles of
incorporation, bylaws or any indemnification agreement between
such directors or officers and Action Performance (in each case,
as in effect on the date of the merger agreement).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event of any claim, action, suit, proceeding or
investigation covered by the indemnification provisions
described above, to the extent not advanced by applicable
insurance carriers, the merger agreement
</DIV>

<P align="center" style="font-size: 10pt;">56

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<DIV align="left" style="font-size: 10pt;">
requires SMISC, to the fullest extent permitted by applicable
law, to cause the surviving corporation of the merger to advance
funds for expenses (including reasonable attorney&#146;s fees)
incurred by a person who was a director of Action Performance
prior to the effective time in defending any civil or criminal
action, suit or proceeding relating to the indemnification
obligations referenced in the immediately preceding paragraph in
advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall be ultimately
determined that he or she is not entitled to such
indemnification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement also provides that, for a period of six
years after the effective time of the merger, SMISC shall cause
to be maintained in effect the current policies of
directors&#146; and officers&#146; liability insurance
maintained by Action Performance (provided that SMISC may
substitute therefor policies provided or extended by SMISC or
the surviving corporation, at the sole election of SMISC, with
reputable and financially sound carriers of at least the same
coverage and amounts containing terms and conditions which are
no less advantageous in the aggregate) with respect to claims
arising from or related to facts or events which occurred at or
before the effective time. However, neither SMISC nor the
surviving corporation are obligated to make annual premium
payments for such insurance to the extent such premiums exceed
300% of the annual premiums paid by Action Performance as of the
date of the merger agreement for such insurance. If such
insurance coverage cannot be obtained at all, or can only be
obtained at an annual premium in excess of 300% of the annual
premiums paid by Action Performance as of the date of the merger
agreement for such insurance, SMISC is obligated to maintain the
most advantageous policies, as determined by SMISC in good
faith, of directors&#146; and officers&#146; insurance
obtainable for an annual premium equal to 300% of the annual
premiums paid by Action Performance as of the date of the merger
agreement for such insurance.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='135'></A>
</DIV>

<!-- link1 "Employee Matters" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Employee Matters</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that for the period beginning at
the effective time of the merger and ending on December&nbsp;31,
2006, SMISC will provide or cause the surviving corporation to
provide all persons who are Action Performance&#146;s and its
subsidiaries&#146; employees on the date of the consummation of
the merger, while employed by the surviving corporation and its
subsidiaries, compensation and employee benefits that, taken as
a whole, are comparable in the aggregate to those provided to
such employees immediately prior to the effective time. Each
such employee will receive credit for purposes of eligibility
and vesting (but not for the purposes of determining the amount
of benefits with respect to any employee benefit plan) under any
employee benefit plan, program or arrangement established or
maintained by SMISC and its subsidiaries under which each
employee may be eligible to participate after the consummation
of the merger to the same extent recognized by Action
Performance or any of its subsidiaries under comparable plans
immediately prior to the date on which the merger is
consummated, unless such crediting of service would have the
effect of duplicating any benefit or the funding of any benefit
or unless such service credit is not provided under a newly
adopted plan to similarly situated employees of SMISC who were
never employees of Action Performance and its subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Furthermore, SMISC is obligated to use its commercially
reasonable efforts to cause each employee of Action Performance
or any subsidiary as of the effective time to be immediately
eligible to participate, without any waiting period, in any and
all plans of SMISC to the extent coverage under any such plan
replaces coverage under a comparable plan of Action Performance
in which such employee participated immediately prior to the
effective time. In addition, for purposes of any plan of SMISC
providing medical, dental, pharmaceutical and/or vision benefits
to any such employee, SMISC has agreed to use its commercially
reasonable efforts to cause all pre-existing condition
exclusions, limitations and actively-at-work requirements of
such plan to be waived for each employee of Action Performance
or its subsidiaries and his or her covered dependents (to the
extent such exclusions, limitations and actively-at-work
requirements were waived or satisfied as of the effective time
under the corresponding Action Performance plan) and to cause
all deductibles, coinsurance and maximum out-of-pocket expenses
incurred by such employee and his or her covered dependents
under any Action Performance plan during the portion of the plan
year of such Action Performance plan ending on the date such
employee&#146;s participation in the corresponding SMISC plan
begins to be taken into account under the SMISC plan for
purposes of satisfying all deductible, co-insurance and
</DIV>

<P align="center" style="font-size: 10pt;">57

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<DIV align="left" style="font-size: 10pt;">
maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year
as if such amounts had been paid in accordance with such SMISC
plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement does not, however, limit the power of SMISC
or the surviving corporation to amend or terminate any
particular welfare benefit plan or any other employee benefit or
pension plan, program, agreement or policy, or require it to
offer to continue the employment of any employee of Action
Performance or any of its subsidiaries for any period of time or
to offer to continue (other than as required by its written
terms) any employee benefit plan. SMISC and Action Performance
have agreed that the merger constitutes a &#147;change of
control&#148; for purposes of each applicable benefit plan or
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='136'></A>
</DIV>

<!-- link1 "Other Agreements" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Other Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger agreement provides that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    until the date on which the merger transaction is consummated,
    each of Action Performance and SMISC must promptly notify each
    other of</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any representation or warranty of such party contained in the
    merger agreement being untrue or inaccurate,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any failure to comply with or satisfy any of such party&#146;s
    covenants, conditions or agreements to be complied with or
    satisfied by it under the merger agreement, although such notice
    will not affect the remedies available under the merger
    agreement.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance will</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    timely file (without extensions) all tax returns required to be
    filed and timely pay all taxes due and payable in respect of
    such returns;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    accrue a reserve in its books and records and financial
    statements for taxes in accordance with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    promptly notify SMISC of any actions pending against or with
    respect to Action Performance or any of its subsidiaries in
    respect of any material amount (individually or in the
    aggregate) of tax and obtain SMISC&#146;s consent (which shall
    not be unreasonably withheld) to any settlement or compromise
    thereof;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtain SMISC&#146;s consent in connection with making (other
    than in the ordinary course of business consistent with past
    practice), amending or revoking any material tax election or
    settling or compromising any material tax liability, other than
    as required by applicable law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtain SMISC&#146;s consent in connection with executing any
    waiver of restrictions on assessment or collection of any
    tax;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cause all existing tax sharing agreements, tax indemnity
    obligations and similar agreements, arrangements or practices
    with respect to taxes to which Action Performance or any of its
    subsidiaries is or may be a party or by which it or its
    subsidiaries is or may otherwise be bound to be terminated as of
    the effective date of the merger.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance will also provide SMISC with copies of any
such tax return that SMISC reasonably requests;
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    as promptly as practicable after the date of the merger
    agreement, Action Performance and SMISC must prepare and Action
    Performance must file with the SEC the proxy statement. With
    respect to this proxy statement:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each of Action Performance and SMISC must use its commercially
    reasonable efforts to respond as promptly as practicable to any
    comments of the SEC with respect to this proxy statement, and
    Action Performance must use its commercially reasonable efforts
    to cause the definitive proxy</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">58

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<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    statement to be mailed to its shareholders as promptly as
    practicable after the date of the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must promptly notify SMISC upon the receipt
    of any comments from the SEC or its staff or any request from
    the SEC or its staff for amendments or supplements to this proxy
    statement or for additional information and must provide SMISC
    with copies of all correspondence between it and its
    representatives, on the one hand, and the SEC and its staff, on
    the other hand, relating to this proxy statement.
    Notwithstanding the foregoing, prior to filing or mailing this
    proxy statement (or any amendment or supplement thereto) or
    responding to any comments from the SEC or the staff of the SEC
    with respect thereto, Action Performance will provide SMISC an
    opportunity to review and comment on such document or response
    and include in such document or response all comments proposed
    by SMISC and reasonably acceptable to Action
    Performance;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance, ISC, SMI, SMISC and Motorsports Authentics
    agreed that the information supplied by them for inclusion or
    incorporation by reference, if any, in this proxy must not, at
    (a)&nbsp;the time this proxy statement (or any amendment thereof
    or supplement thereto) is first mailed to the shareholders of
    Action Performance, and (b)&nbsp;the time of the
    shareholders&#146; meeting contain any untrue statement of a
    material fact or fail to state any material fact required to be
    stated therein or necessary in order to make the statements
    therein, in light of the circumstances under which they were
    made, not misleading.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    subject to compliance with applicable law, Action Performance
    will:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    afford to SMISC and its officers, employees, accountants,
    counsel, financial advisors and other representatives,
    reasonable access (including for the purpose of coordinating
    integration activities and transition planning with the
    employees of Action Performance and its subsidiaries) during
    normal business hours during the period prior to the effective
    time or the termination of the merger agreement to all of Action
    Performance&#146;s and its subsidiaries&#146; properties, books,
    contracts, commitments, personnel and records;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    furnish promptly to SMISC</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a copy of each report, schedule, registration statement and
    other document filed by it during such period pursuant to the
    requirements of Federal or state securities laws,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    all other information concerning Action Performance&#146;s and
    its subsidiaries&#146; business, properties and personnel as
    SMISC may reasonably request and receive consistent with
    applicable law and agreements.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    The information so provided, however, will be subject to the
    terms of the confidentiality agreement executed by SMISC or its
    affiliates and Action Performance on June&nbsp;17, 2005;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    afford to SMISC and its representatives access to, and
    facilitate and participate in discussions with, all drivers,
    team owners, sanctioning bodies, automobile manufacturers and
    other licensors for purposes of discussing such parties&#146;
    license agreements and other contracts with Action Performance
    and its subsidiaries; provided, that all such discussions must
    be arranged by Action Performance and are to be undertaken
    jointly by SMISC and Action Performance unless they otherwise
    agree;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon the terms and subject to the conditions of the merger
    agreement, Action Performance, SMISC and Motorsports Authentics
    will each use its commercially reasonable efforts to take, or
    cause to be taken, all actions, and to do, or cause to be done,
    and to assist and cooperate with the other parties in doing, all
    things necessary, proper or advisable to consummate and make
    effective, in the most expeditious manner practicable, the
    merger and the other transactions contemplated by the merger
    agreement, including using commercially reasonable efforts to:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    take all acts necessary to cause the conditions to closing to be
    satisfied as promptly as practicable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtain all necessary actions or nonactions, waivers, consents
    and approvals from governmental entities and make all necessary
    registrations and filings (including filings with governmental</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">59
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    entities) and take all steps as may be necessary to obtain an
    approval or waiver from, or to avoid an action or proceeding by,
    any governmental entity;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtain all necessary consents, approvals or waivers from third
    parties;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    as promptly as practicable, Action Performance and SMISC each
    must file with the United States Federal Trade Commission and
    the Antitrust Division of the United States Department of
    Justice any notification and report forms relating to the merger
    required by the HSR Act. Action Performance and SMISC each will
    cooperate with the other party to the extent necessary to assist
    the other party in the preparation of its HSR Act filing and, if
    requested, to promptly amend or furnish additional information
    thereunder and use its commercially reasonable efforts to:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    take such actions as are necessary or advisable to obtain prompt
    approval of the consummation of the merger by any governmental
    entity;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    resolve any objections and challenges, including by contest
    through litigation on the merits, negotiation or other action,
    that may be asserted by any governmental entity or third party
    with respect to the transaction contemplated by the merger
    agreement under the HSR Act or any other antitrust or unfair
    competition law, rule or regulation. In the event of any such
    litigation, such litigation will be directed by SMISC, and SMISC
    will pay all of Action Performance&#146;s litigation costs in
    excess of $100,000. Notwithstanding the foregoing, SMISC is not
    required to initiate or continue any such litigation if SMISC
    determines that the litigation costs it would be required to
    bear (including any litigation costs of Action Performance in
    excess of $100,000) are reasonably likely to exceed $1,000,000,
    or SMISC determines in good faith (after consultation with
    outside counsel) that SMISC, Action Performance or one of their
    affiliates will be required to proffer, divest or hold separate
    any material assets or any material portion of any business of
    SMISC, Action Performance or any of their affiliates in
    connection with resolving any such objection or challenge. In
    addition, in the event of such litigation, SMISC may not effect
    any settlement which will in any way affect the consideration to
    be received by the holders of shares of Action Performance
    common stock or holders of Action Performance options or
    warrants without Action Performance&#146;s prior consent;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance and its board of directors will:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    take all action necessary to ensure that no state takeover
    statute or similar statute or regulation is or becomes
    applicable to the merger agreement, the shareholder agreement
    and the merger,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    if any state takeover statute or similar statute becomes
    applicable to the merger agreement, the shareholder agreement
    and the merger, take all action necessary to ensure that the
    merger may be consummated as promptly as practicable on the
    terms contemplated by the merger agreement and otherwise to
    minimize the effect of such statute or regulation on the merger
    agreement and the shareholder agreement;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our board of directors (or, if appropriate, any committee
    thereof administering Action Performance&#146;s stock option
    plans) will adopt such resolutions or take such other actions
    with respect to Action Performance&#146;s outstanding stock
    options and warrants as may be required to effectuate the terms
    of the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    after the initial press release relating to the merger
    agreement, which was a joint press release, Action Performance
    and SMISC must use their respective reasonable efforts to
    consult with each other before issuing, and to the extent
    reasonably feasible give each other the opportunity to review
    and comment upon, any press release or other public statements
    with respect to the merger, except to the extent public
    disclosure is required by applicable law, court process or by
    obligations pursuant to any listing agreement with any national
    securities exchange or national securities quotation
    system;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    until the merger agreement is terminated, SMISC has the right to
    participate, at its own cost, in the defense or settlement of
    any shareholder litigation against Action Performance (or any of
    its directors) relating to the merger, and Action Performance
    may not settle any such litigation without SMISC&#146;s</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">60

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    prior written consent to the extent such settlement is for an
    amount which exceeds Action Performance&#146;s insurance
    coverage plus the applicable deductible.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
<A name='137'></A>
</DIV>

<!-- link1 "Conditions to the Merger" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Conditions to the Merger</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Closing Conditions for Each Party</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The obligations of Action Performance, ISC, SMI, SMISC and
Motorsports Authentics to consummate the merger are subject to
the satisfaction or, to the extent permitted by law, waiver by
the other parties, at or prior to the closing date of the
merger, of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the approval of the merger agreement by holders of a majority of
    the shares of Action Performance common stock outstanding on the
    record date in accordance with the provisions of the Arizona
    Business Corporation Act and the articles of incorporation and
    bylaws of Action Performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any applicable waiting periods under the HSR Act will have
    expired or been terminated;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    no temporary restraining order, preliminary or permanent
    injunction or other judgment or order issued by a court of
    competent jurisdiction, or other statute, law, rule, legal
    restraint or prohibition will be in effect which prevents the
    consummation of the merger or which otherwise would reasonably
    be expected to have a material adverse effect.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Additional Closing Conditions for SMISC and Motorsports
    Authentics</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC&#146; and Motorsports Authentics&#146; obligations to
consummate the merger are subject to the fulfillment of the
following additional conditions, any of which may be waived by
SMISC:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the representations and warranties of Action Performance
    contained in the merger agreement that are qualified as to
    materiality must be true and correct, and the representations
    and warranties of Action Performance contained in the merger
    agreement that are not so qualified must be true and correct in
    all material respects, in each case as of the date of the merger
    agreement and as of the date on which the merger is to be
    consummated as though such representations and warranties were
    made on such consummation date, except to the extent such
    representations and warranties expressly relate to an earlier
    date, in which case as of such earlier date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must have performed in all material respects
    all obligations required to be performed by it under the merger
    agreement at or prior to the date on which the merger is to be
    consummated;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must deliver to SMISC a certificate signed by
    its chief executive officer, chief operating officer and chief
    financial officer dated as of the date on which the merger is to
    be consummated to the effect that the conditions described in
    the two prior bullet points have been satisfied;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    there must not be pending, or, to the knowledge of Action
    Performance, any overt, written credible threat of, any suit,
    action or proceeding by any governmental authority or any other
    person, having a reasonable likelihood of success,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    challenging the merger agreement or the transactions
    contemplated thereby, seeking to restrain or prohibit the
    merger, or seeking to place limitations on the ownership of
    shares of Action Performance common stock (or shares of common
    stock of the surviving corporation) by SMISC or Motorsports
    Authentics, or seeking to obtain from Action Performance any
    damages that are material in relation to Action Performance,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    seeking to prohibit or materially limit the ownership or
    operation by Action Performance, SMISC or any of their
    subsidiaries of any portion of any business or any assets of
    Action Performance, SMISC or any of their respective
    subsidiaries, or to compel Action Performance, SMISC or any of
    their respective subsidiaries to divest or hold separate any
    portion of any business or of any assets of Action Performance,
    SMISC or any of their respective subsidiaries,&nbsp;or</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">61

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    seeking to prohibit SMISC or any of its subsidiaries from
    effectively controlling in any material respect the business or
    operations of Action Performance or any of its subsidiaries;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must not have suffered a material adverse
    effect since the date of the merger agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must have delivered to SMISC an executed copy
    of the fairness opinion of SunTrust Robinson Humphrey;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must have delivered to SMISC audited
    financial statements for its fiscal year ended
    September&nbsp;30, 2005, including an unqualified opinion of
    Action Performance&#146;s independent auditors as to such
    financial statements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must have provided a written representation
    to SMISC setting forth any and all deficiencies, significant
    deficiencies, and/or material weaknesses noted in Action
    Performance&#146;s compliance efforts with Section&nbsp;404 of
    the Sarbanes-Oxley Act of 2002, as amended to date, and a
    separate written description of remediation and/or proposed
    remediation plans for such deficiencies, significant
    deficiencies, and/or material weaknesses, and the remediation or
    proposed remediation plan with respect to any identified
    material weakness must reasonably be expected to prevent a
    material adverse effect;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance must have obtained and delivered to SMISC the
    consents of specified drivers, driver teams and automobile
    manufacturers to the merger.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Additional Closing Conditions for Action
    Performance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance&#146;s obligation to consummate the merger is
subject to the fulfillment of the following additional
conditions, which may be waived by it:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the representations and warranties of SMISC and Motorsports
    Authentics contained in the merger agreement that are qualified
    as to materiality must be true and correct, and the
    representations and warranties of SMISC and Motorsports
    Authentics contained in the merger agreement that are not so
    qualified must be true and correct in all material respects, in
    each case as of the date of the merger agreement and as of the
    date on which the merger is to be consummated as though such
    representations and warranties were made on such consummation
    date, except to the extent such representations and warranties
    expressly relate to an earlier date, in which case as of such
    earlier date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC and Motorsports Authentics must have performed in all
    material respects all obligations required to be performed by
    them under the merger agreement at or prior to the date on which
    the merger is to be consummated;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC must have delivered to Action Performance a certificate
    signed by an executive officer dated as of the date on which the
    merger is to be consummated to the effect that the conditions
    described in the two prior bullet points have been satisfied.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">
<A name='138'></A>
</DIV>

<!-- link1 "Termination of the Merger Agreement" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Termination of the Merger Agreement</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Circumstances Under Which Any Party May Terminate the
    Merger Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC, Motorsports Authentics and Action Performance may
mutually agree to terminate the merger agreement at any time
upon the approval of their respective boards of directors or
other authorized persons. SMISC or Action Performance may also
terminate the merger agreement at any time if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the merger is not consummated by December&nbsp;31, 2005 (but no
    party may terminate the merger agreement on this basis if its
    breach of a representation or warranty or failure to fulfill any
    obligation under the merger agreement has been a principal cause
    of, or resulted in, the failure of the merger to occur on or
    before December&nbsp;31, 2005);</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">62

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a court or any governmental entity has issued a final and
    nonappealable order, decree or ruling or taken any other action,
    or there shall be in effect any statute, law, rule, legal
    restraint or prohibition, in either case permanently
    restraining, enjoining or otherwise prohibiting the merger or
    which would otherwise reasonably be expected to have a material
    adverse effect (but, if such order, decree, ruling or action
    relates to any antitrust or unfair competition law, rule or
    regulation, then SMISC may only terminate the merger agreement
    on this basis if it is in compliance with its obligations to
    litigate any such matters as described above under &#147;Other
    Agreements&#148;;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the requisite vote of Action Performance&#146;s shareholders
    required for approval of the merger was not obtained at the
    special meeting or any adjournment or postponement of such
    special meeting.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Circumstances Under Which SMISC May Terminate the Merger
    Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMISC may also terminate the merger agreement at any time, if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance has breached or failed to perform any of its
    representations, warranties, covenants or other agreements
    contained in the merger agreement that would give rise to a
    failure of a condition described in any of the first two bullet
    points under &#147;&#151;&nbsp;Conditions to the
    Merger&nbsp;&#151; Additional Closing Conditions for SMISC and
    Motorsports Authentics&#148; and is incapable of being cured, or
    which has not been cured (if capable of being cured) by
    December&nbsp;31, 2005 (but SMISC may not terminate the merger
    agreement on this basis if it or Motorsports Authentics is in
    material breach of any representation, warranty, covenant or
    agreement set forth in the merger agreement);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a court or any governmental entity has issued a final and
    nonappealable order, decree or ruling or taken any other action,
    or there shall be in effect any statute, law, rule, legal
    restraint or prohibition, in either case</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    restraining or prohibiting the merger, or placing limitations on
    the ownership of shares of Action Performance common stock (or
    shares of common stock of the surviving corporation) by SMISC or
    Motorsports Authentics, or imposing upon Action Performance any
    damages that are material in relation to Action Performance,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prohibiting or materially limiting the ownership or operation by
    Action Performance, SMISC or any of their subsidiaries of any
    portion of any business or any assets of Action Performance,
    SMISC or any of their respective subsidiaries, or compelling
    Action Performance, SMISC or any of their respective
    subsidiaries to divest or hold separate any portion of any
    business or of any assets of Action Performance, SMISC or any of
    their respective subsidiaries,&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prohibiting SMISC or any of its subsidiaries from effectively
    controlling in any material respect the business or operations
    of Action Performance or any of its subsidiaries;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our board of directors</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    withdraws or modifies in a manner adverse to SMISC, or proposes
    to so withdraw or modify, the approval, recommendation or
    adoption by the board of directors of the merger agreement and
    the merger,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    recommends, adopts or approves, or proposes to so recommend,
    adopt or approve, any alternative transaction,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fails publicly to reaffirm its recommendation of the merger
    agreement and the merger within five business days of receipt of
    a written request by SMISC to provide such reaffirmation
    following the receipt by Action Performance of a proposal for an
    alternative transaction,&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    notifies SMISC it has received a superior proposal and that a
    majority of the disinterested directors of Action Performance
    have determined in good faith, after consultation with outside
    counsel, that the failure to withdraw or modify its
    recommendation of the merger agreement and the merger would
    violate the board of director&#146;s fiduciary duties to Action
    Performance&#146;s shareholders under applicable law;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">63

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC determines that any litigation costs it would be required
    to bear in connection with resolving any objections and
    challenges asserted by any governmental entity or third party
    with respect to the transactions contemplated by the merger
    agreement under the HSR Act or any other antitrust or unfair
    competition law, rule or regulation are reasonably likely to
    exceed $1,000,000, or SMISC determines in good faith (after
    consultation with outside counsel) that SMISC, Action
    Performance or one of their affiliates will be required to
    proffer, divest or hold separate any material assets or any
    material portion of any business of SMISC, Action Performance or
    any of their affiliates in connection with resolving any such
    objection or challenge;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance fails to deliver its audited financial
    statements for its fiscal year ended September&nbsp;30, 2005,
    including an unqualified opinion of Action Performance&#146;s
    independent auditors as to its financial statements, or its
    written representation concerning deficiencies, significant
    deficiencies and/or material weaknesses (and the proposed
    remediation plans), to SMISC by December&nbsp;31, 2005;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount required to obtain the consents of the specified
    drivers, driver teams and automobile manufacturers described
    above exceeds, in the aggregate, $1,000,000 (exclusive of any
    expenses, settlement amounts, or damages arising out of
    litigation relating to this transaction).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Circumstances Under Which Action Performance May Terminate
    the Merger Agreement</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance may also terminate the merger agreement at
any time, if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    there is a breach or failure to perform by SMISC or Motorsports
    Authentics of any of their respective representations,
    warranties, covenants or other agreements contained in the
    merger agreement that would give rise to a failure of a
    condition described in any of the first two bullet points under
    &#147;&#151;&nbsp;Conditions to the Merger&nbsp;&#151;
    Additional Closing Conditions for Action Performance&#148; and
    is incapable of being cured, or which has not been cured (if
    capable of being cured) by December&nbsp;31, 2005 (but Action
    Performance may not terminate the merger agreement on this basis
    if it is in material breach of any representation, warranty,
    covenant or agreement set forth in the merger agreement
    );&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    (a)&nbsp;our board of directors has received an unsolicited,
    bona fide, written proposal for an alternative transaction which
    constitutes a superior proposal, (b)&nbsp;in light of such
    superior proposal a majority of the disinterested directors of
    Action Performance have determined in good faith, after
    consultation with outside counsel, that the failure to withdraw
    or modify its recommendation of the merger agreement and the
    merger would violate the board of directors&#146; fiduciary
    duties to Action Performance&#146;s shareholders under
    applicable law, (c)&nbsp;Action Performance has notified SMISC
    in writing of the determinations described in clause&nbsp;(b)
    above, (d)&nbsp;at least five business days following receipt by
    SMISC of the notice referred to in clause&nbsp;(c) above, and
    taking into account any revised proposal made by SMISC since
    receipt of the notice referred to in clause&nbsp;(c) above, such
    superior proposal remains a superior proposal and a majority of
    the disinterested directors of Action Performance has again made
    the determinations referred to in clause&nbsp;(b) above,
    (e)&nbsp;Action Performance is in compliance, in all material
    respects, with the nonsolicitation requirements and provisions
    under the merger agreement described under
    &#147;&#151;&nbsp;Special Meeting of Action Performance
    Shareholders; Recommendation of Our Board of Directors,&#148;
    (f)&nbsp;Action Performance has paid the termination fee and
    expense reimbursement (as described below) due to SMISC under
    the merger agreement, (g)&nbsp;the board of directors of Action
    Performance concurrently approves, and Action Performance
    concurrently enters into, a definitive agreement providing for
    the implementation of such superior proposal and (h)&nbsp;SMISC
    is not at such time entitled to terminate the merger agreement
    as a result of Action Performance&#146;s breach or failure to
    perform any of its representations, warranties, covenants or
    other agreements contained in the merger agreement that would
    give rise to a failure of a condition described in any of the
    first two bullet points under &#147;&#151;&nbsp;Conditions to
    the Merger&nbsp;&#151; Additional Closing Conditions for SMISC
    and Motorsports Authentics.&#148;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">64

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='139'></A>
</DIV>

<!-- link1 "Effects of Terminating the Merger Agreement" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Effects of Terminating the Merger Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the merger agreement is terminated, the merger agreement
becomes void and there will be no liability on the part of
Action Performance, SMISC or their respective officers,
directors, shareholders, or members, except
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    for the fees and expenses described below,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    as relating to publicity, confidentiality and certain other
    miscellaneous provisions of the merger agreement,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    that neither Action Performance, on the one hand, nor SMISC or
    Motorsports Authentics, on the other hand, will be relieved from
    any liabilities arising out of any willful and material breach
    of such party of any of its respective representations,
    warranties, covenants or other agreements contained in the
    merger agreement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance and SMISC have agreed to make certain
payments to each other upon termination of the merger agreement
in the following circumstances:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Circumstances Under Which SMISC Must Pay Action
    Performance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>First,</I></B> if
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance terminates the merger agreement because SMISC
    and Motorsports Authentics have breached or failed to perform
    any of their respective representations, warranties, covenants
    or other agreements contained in the merger agreement that would
    give rise to a failure of a condition described in any of the
    first two bullet points under &#147;&#151;&nbsp;Conditions to
    the Merger&nbsp;&#151; Additional Closing Conditions for Action
    Performance&#148; and which is incapable of being cured, or has
    not been cured (if capable of being cured) by December&nbsp;31,
    2005;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    then SMISC must,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon such termination, pay to Action Performance termination
    expenses equal to the reasonable and documented out-of-pocket
    expenses of Action Performance, not to exceed $1.55&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Second,</I></B> if
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC terminates the merger agreement because (a)&nbsp;SMISC
    determines that any litigation costs it would be required to
    bear in connection with resolving any objections and challenges
    asserted by any governmental entity or third party with respect
    to the transaction contemplated by the merger agreement under
    the HSR Act or any other antitrust or unfair competition law,
    rule or regulation are reasonably likely to exceed $1,000,000,
    or SMISC determines in good faith (after consultation with
    outside counsel) that SMISC, Action Performance or one of their
    affiliates will be required to proffer, divest or hold separate
    any material assets or any material portion of any business of
    SMISC, Action Performance or any of their affiliates in
    connection with resolving any such objection or challenge, or
    (b)&nbsp;a court or any governmental entity has issued a final
    and nonappealable order, decree or ruling or taken any other
    action relating to any antitrust or unfair competition law, rule
    or regulation, or there shall be in effect any statute, law,
    rule, legal restraint or prohibition relating to any antitrust
    or unfair competition law, rule or regulation, in either case
    (i)&nbsp;restraining or prohibiting the merger, or placing
    limitations on the ownership of shares of Action Performance
    common stock (or shares of common stock of the surviving
    corporation) by SMISC or Motorsports Authentics, or imposing on
    Action Performance any damages that are material in relation to
    Action Performance, (ii)&nbsp;prohibiting or materially limiting
    the ownership or operation by Action Performance, SMISC or any
    of their subsidiaries of any portion of any business or any
    assets of Action Performance, SMISC or any of their respective
    subsidiaries, or compelling Action Performance, SMISC or any of
    their respective subsidiaries to divest or hold separate any
    portion of any business or of any assets of Action Performance,
    SMISC or any of their respective subsidiaries,
    (iii)&nbsp;prohibiting SMISC or any of its subsidiaries from
    effectively controlling in any material respect the business or
    operations of Action</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">65

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    Performance or any of its subsidiaries, or (iv)&nbsp;which would
    otherwise reasonably be expected to have a material adverse
    effect;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    then SMISC must,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon such termination, pay to Action Performance termination
    expenses equal to the reasonable and documented out-of-pocket
    expenses of Action Performance, not to exceed $1.55&nbsp;million.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Circumstances Under Which Action Performance Must Pay
    SMISC</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>First,</I></B> if
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC terminates the merger agreement because (a)&nbsp;Action
    Performance has breached or failed to perform any of its
    representations, warranties, covenants or other agreements
    contained in the merger agreement that would give rise to a
    failure of a condition described in any of the first two bullet
    points under &#147;&#151;&nbsp;Conditions to the
    Merger&nbsp;&#151; Additional Closing Conditions for SMISC and
    Motorsports Authentics&#148; and which is incapable of being
    cured, or has not been cured (if capable of being cured) by
    December&nbsp;31, 2005, or (b)&nbsp;Action Performance has
    failed to deliver to SMISC by December&nbsp;31, 2005
    (i)&nbsp;its audited financial statements for its fiscal year
    ended September&nbsp;30, 2005, including an unqualified opinion
    of Action Performance&#146;s independent auditors as to its
    financial statements, or (ii)&nbsp;its written representation
    concerning deficiencies, significant deficiencies and/or
    material weaknesses (and the proposed remediation plans);</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    then Action Performance must,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon such termination, pay to SMISC termination expenses equal
    to the reasonable and documented out-of-pocket expenses of
    SMISC, not to exceed $1.55&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Second,</I></B> if
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SMISC terminates the merger agreement because our board of
    directors (a)&nbsp;withdraws or modifies in a manner adverse to
    SMISC, or proposes to so withdraw or modify, the approval,
    recommendation or adoption by the board of directors of the
    merger agreement and the merger, (b)&nbsp;recommends, adopts or
    approves, or proposes to so recommend, adopt or approve, any
    alternative transaction, (c)&nbsp;fails publicly to reaffirm its
    recommendation of the merger agreement and the merger within
    five business days of receipt of a written request by SMISC to
    provide such reaffirmation following the receipt by Action
    Performance of a proposal for an alternative transaction, or
    (d)&nbsp;notifies SMISC it has received a superior proposal and
    that a majority of the disinterested directors of Action
    Performance have determined in good faith, after consultation
    with outside counsel, that the failure to withdraw or modify its
    recommendation of the merger agreement and the merger would
    violate the board of director&#146;s fiduciary duties to Action
    Performance&#146;s shareholders under applicable law,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    then Action Performance must,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon such termination, pay to SMISC termination expenses equal
    to the reasonable and documented out-of-pocket expenses of
    SMISC, not to exceed $1.55&nbsp;million, and a termination fee
    in the amount of $7.0&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Third,</I></B> if
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance or SMISC terminates the merger agreement
    because the merger has not occurred on or before
    December&nbsp;31, 2005 or because the shareholder approval
    required for the consummation of the merger has not been
    obtained at the special meeting or any adjournment of such
    meeting and (a)&nbsp;prior to the date of such termination, an
    alternative transaction proposal had been communicated to our
    board of directors or directly to our shareholders or otherwise
    had become publicly known, or any person had publicly announced
    an intention (whether or not conditional) to propose such an
    alternative transaction, and (b)&nbsp;within 12&nbsp;months of
    such termination, Action Performance enters into a definitive
    agreement to consummate, or consummates, a merger, business
    combination, acquisition or other such transaction, regardless
    of whether related to such alternative transaction proposal, of a</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">66

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    type that is described in the definition of &#147;takeover
    proposal&#148; provided above, substituting 32% for all
    references to 15% in the definition (referred to herein as a
    &#147;takeover transaction&#148;),</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    then Action Performance must,</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon the earlier of the consummation of such takeover
    transaction or Action Performance&#146;s entering into the
    agreement to engage in such takeover transaction, pay to SMISC
    termination expenses equal to the reasonable and documented
    out-of-pocket expenses of SMISC, not to exceed
    $1.55&nbsp;million, and a termination fee in the amount of
    $7.0&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Fourth,</I></B> if
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Action Performance terminates the merger agreement because our
    board of directors has, in accordance with the provisions of the
    merger agreement, determined to accept a superior proposal, </TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    then Action Performance must</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upon such termination, pay to SMISC termination expenses equal
    to the reasonable and documented out-of-pocket expenses of
    SMISC, not to exceed $1.55&nbsp;million, and a termination fee
    in the amount of $7.0&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All termination payments, as described above, must be paid by
wire transfer in immediately available funds to the applicable
party. If a party fails to promptly make any termination or
other payments required by the merger agreement and the other
party commences a suit to collect such payment, the first party
must indemnify the other party for its fees and expenses
(including attorneys fees and expenses) incurred in connection
with such suit and must pay interest on the amount of the
payment at the prime rate of Wachovia Bank, N.A. in effect on
the date the payment was payable pursuant to the terms of the
merger agreement.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='140'></A>
</DIV>

<!-- link1 "Fees and Expenses" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Fees and Expenses</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as otherwise described under &#147;&#151;&nbsp;Effects of
Terminating the Merger Agreement&#148; above, all costs and
expenses incurred in connection with the merger agreement and
the merger, including the fees and disbursements of counsel,
financial advisors and accountants, will be paid by the party
incurring such expenses, whether or not the merger is
consummated, except that SMISC is responsible for any filing
fees required under the HSR Act.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='141'></A>
</DIV>

<!-- link1 "Modification or Amendment of the Merger Agreement" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Modification or Amendment of the Merger Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any provision of the merger agreement may be amended, modified
or waived by Action Performance, SMISC or Motorsports Authentics
prior to the consummation of the merger, whether before or after
approval of the merger agreement by the shareholders of Action
Performance, by an instrument signed by each party to the merger
agreement in the case of an amendment or, in the case of a
waiver, by the party against whom the waiver is to be effective.
However, after the shareholder approval of the merger agreement,
no amendment may be made without further shareholder approval if
such amendment requires shareholder approval under the Arizona
Business Corporation Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Guaranty by ISC and SMI</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the merger agreement, each of ISC and SMI unconditionally
and irrevocably guaranteed severally, but not jointly, to Action
Performance the due and punctual performance of each of the
obligations and the undertakings of SMISC and Motorsports
Authentics under the merger agreement during the period from the
date of the merger agreement and until the consummation of the
transactions contemplated thereby. In accordance with this
guarantee, if either SMISC or Motorsports Authentics were to
fail to perform fully and punctually any obligation or
undertaking of SMISC or Motorsports Authentics under the merger
agreement, when and to the extent the same is required to be
performed, including the obligation to pay the merger
consideration required to be paid under the merger agreement,
then each of ISC and SMI, upon written demand from Action
Performance, must perform or cause to be performed such
obligation or undertaking, as the case may be. The obligations
of each of ISC and SMI under this guaranty constitute an
</DIV>

<P align="center" style="font-size: 10pt;">67

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
absolute and unconditional present and continuing guarantee of
performance to the extent provided in the merger agreement and
are not contingent upon any attempt by Action Performance to
enforce performance by SMISC or Motorsports Authentics.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the merger agreement, SMISC represented and warranted to
Action Performance that it had sufficient cash on hand, or
commitments from ISC and SMI, to pay the aggregate merger
consideration payable to holders of Action Performance common
stock, options and warrants. Such representation and warranty,
together with the guaranty of each of ISC and SMI described
above, means that the consummation of the transactions
contemplated by the merger agreement are not contingent upon
SMISC&#146;s receipt of third party financing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Shareholder Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As an inducement to entering into the merger agreement, Fred W.
Wagenhals, Action Performance&#146;s chief executive officer and
largest shareholder, executed a shareholder agreement with
SMISC, which is attached as Appendix&nbsp;C to this Proxy
Statement. Under the terms of the shareholder agreement,
Mr.&nbsp;Wagenhals agreed to vote all outstanding shares of
capital stock of Action Performance over which he beneficially
holds voting power (approximately 9.7% of our outstanding shares
of capital stock as of the record date for the special meeting)
in favor of the approval of the merger agreement and the merger
and against approval of any proposal made in opposition to or in
competition with the consummation of the merger. The shareholder
agreement terminates on the earlier of the date of the
consummation of the merger or the date on which the merger
agreement has been validly terminated. In addition, under the
terms of the shareholder agreement, Mr.&nbsp;Wagenhals
irrevocably granted to SMISC and certain of its managers a proxy
to vote his shares in favor of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    approval of the merger agreement and approval of the merger and
    against approval of any proposal made in opposition to or in
    competition with the consummation of the merger;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    against any amendment of Action Performance&#146;s articles of
    incorporation or bylaws or any other proposal or transaction
    (including any consent solicitation to remove or elect any
    directors on the Action Performance board of directors)
    involving Action Performance, which amendment or other proposal
    or transaction would in any manner impede, frustrate, prevent or
    nullify, or result in a breach of any covenant, representation
    or warranty or any other obligation or agreement of Action
    Performance under or with respect to, the merger, the merger
    agreement or any of the other transactions contemplated by the
    merger agreement or change in any manner the voting rights of
    the common stock of Action Performance.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Wagenhals agreed that he shall not directly or
indirectly, cause or permit any transfer, pledge, assignment or
disposition of the Subject Shares (as defined in the Shareholder
Agreement), nor would he permit any entity under his control to,
deposit any Subject Shares in a voting trust. Mr.&nbsp;Wagenhals
also agreed that he would not, nor authorize or permit any of
his employees or affiliates, or any investment banker, financial
advisor, attorney, accountant or other advisor, agent or
representative to, directly or indirectly (i)&nbsp;solicit,
initiate or encourage, or knowingly take any other action
designed to, or which would reasonably be expected to,
facilitate, any inquiries or the making of any proposal that
constitutes or would reasonably be expected to lead to a
Takeover Proposal (as defined in the Shareholder Agreement) or
(ii)&nbsp;enter into, continue or otherwise participate in any
discussions or negotiations regarding, or furnish to any person
any non-public information with respect to, any Takeover
Proposal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Arizona&#146;s anti-takeover statute, an Arizona
corporation is prohibited from engaging in a business
combination with a shareholder who owns or controls 10% or more
of the voting power of the corporation&#146;s stock (an
&#147;interested shareholder&#148;) for three years after the
shareholder attains such status, unless the transaction that
gave rise to such status (or the subject business combination)
is approved by a committee of disinterested members of the board
of directors before the person becomes an interested
shareholder. Accordingly, the execution of the shareholder
agreement, by giving SMISC voting control of approximately 10.2%
of Action Performance&#146;s outstanding common stock (including
for this purpose, shares of common stock issuable upon exercise
of vested options), may have made SMISC an &#147;interested
shareholder.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">68

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to ensure that SMISC did not become an &#147;interested
shareholder&#148; for purposes of the Arizona anti-takeover
statute, our board of directors formed a special committee
consisting of Messrs.&nbsp;Robertson, Matthews, Herberger and
Gallagher, and Ms.&nbsp;Mariucci, each of whom is a
&#147;disinterested&#148; member of the board for purposes of
the statute, and authorized the special committee to consider
and take such actions as it deemed appropriate, in its sole
discretion, concerning the approval or disapproval of the
shareholder agreement, the potential status of SMISC as an
&#147;interested shareholder&#148; and the &#147;business
combination&#148; contemplated by the merger agreement. At a
meeting of the special committee convened on August&nbsp;27,
2005, for the reasons described above under &#147;Reasons for
the Merger; Recommendations of our Board of Directors; Fairness
of the Merger&nbsp;&#151; The Action Performance Board of
Directors,&#148; the special committee approved and adopted the
merger agreement, the shareholder agreement and the transactions
contemplated under each, and approved SMISC as an
&#147;interested shareholder.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">69

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<DIV align="left" style="font-size: 10pt;">
<A name='142'></A>
</DIV>

<!-- link1 "MARKET PRICE OF ACTION PERFORMANCE&#146;S COMMON STOCK" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>MARKET PRICE OF ACTION PERFORMANCE&#146;S COMMON STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our common stock is traded on the NYSE under the symbol
&#147;ATN.&#148; The following table sets forth the high and low
sales prices per share of our common stock on the NYSE for each
calendar quarter indicated as reported on the NYSE.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="79%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>High</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Low</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter (ended December&nbsp;31, 2003)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>27.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter (ended March&nbsp;31, 2004)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>19.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter (ended June&nbsp;30, 2004)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.57</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter (ended September&nbsp;30, 2004)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter (ended December&nbsp;31, 2004)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter (ended March&nbsp;31, 2005)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9.63</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter (ended June&nbsp;30, 2005)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter (ended September&nbsp;30, 2005)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.00</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The closing sale price of our common stock on the NYSE on
August&nbsp;29, 2005, the last trading day before Action
Performance announced the execution of the merger agreement, was
$11.99&nbsp;per share.
On &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, the last trading day before this proxy statement was
printed, the closing price for Action Performance&#146;s common
stock on the NYSE was
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. You are encouraged to obtain current market quotations
for Action Performance common stock in connection with voting
your shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 2002, we initiated an ongoing quarterly dividend
policy with respect to our common stock with an initial dividend
of $0.03&nbsp;per share. A summary of the dividends paid on our
common stock after September&nbsp;30, 2003 follows (in
thousands, except per share data):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rate Per Share</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acceleration Date</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Record Date</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $914</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>September&nbsp;22, 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>September&nbsp;26, 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>October&nbsp;13, 2003</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $915</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>December&nbsp;10, 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>December&nbsp;19, 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>January&nbsp;12, 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $917</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>March&nbsp;5, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>March&nbsp;19, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>April&nbsp;12, 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $917</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>June&nbsp;9, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>June&nbsp;18, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>July&nbsp;12, 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $919</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>August&nbsp;19, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>September&nbsp;17, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>October&nbsp;18, 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $924</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>November&nbsp;12, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>December&nbsp;17, 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>January&nbsp;5, 2005</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not declared or paid any dividends on our common stock
for our past three fiscal quarters ended March&nbsp;31, 2005,
June&nbsp;30, 2005 and September&nbsp;30, 2005. We are currently
restricted by the terms of our credit agreement, as well as the
merger agreement, from paying cash dividends.
</DIV>

<P align="center" style="font-size: 10pt;">70

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<DIV align="left" style="font-size: 10pt;">
<A name='143'></A>
</DIV>

<!-- link1 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table contains information regarding the
beneficial ownership of shares of Action Performance common
stock by each person or entity known by Action Performance to
beneficially own 5% or more of the total number of outstanding
shares of Action Performance common stock. This information has
been obtained from filings with the SEC as of August&nbsp;15,
2005. The following table also contains information regarding
the beneficial ownership of shares of Action Performance common
stock as of August&nbsp;15, 2005 by (i)&nbsp;each director of
Action Performance, (ii)&nbsp;the person who served as chief
executive officer of Action Performance during fiscal year 2004,
(iii)&nbsp;the other four most highly compensated executive
officers of Action Performance serving as such on
September&nbsp;30, 2004, and (iv)&nbsp;the directors and
executive officers of Action Performance as of
September&nbsp;30, 2004 as a group.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares Beneficially Owned</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Name of Beneficial Owner(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number(2)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent(2)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Directors and Executive Officers</I></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Herbert M. Baum</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>146,000</TD>
    <TD align="left" valign="bottom" nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fred W. Wagenhals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,413,599</TD>
    <TD align="left" valign="bottom" nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Melodee L. Volosin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>226,800</TD>
    <TD align="left" valign="bottom" nowrap>(5)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    David R. Riddiford</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,000</TD>
    <TD align="left" valign="bottom" nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Edward J. Bauman</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,000</TD>
    <TD align="left" valign="bottom" nowrap>(7)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    L. David Martin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253,503</TD>
    <TD align="left" valign="bottom" nowrap>(8)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    John S. Bickford,&nbsp;Sr.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,333</TD>
    <TD align="left" valign="bottom" nowrap>(9)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Michael L. Gallagher</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,000</TD>
    <TD align="left" valign="bottom" nowrap>(10)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Roy A. Herberger,&nbsp;Jr.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,300</TD>
    <TD align="left" valign="bottom" nowrap>(11)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Anne L. Mariucci</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,000</TD>
    <TD align="left" valign="bottom" nowrap>(12)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Robert L. Matthews</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,300</TD>
    <TD align="left" valign="bottom" nowrap>(13)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Lowell L. Robertson</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,500</TD>
    <TD align="left" valign="bottom" nowrap>(14)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All executive officers and directors as a group (9&nbsp;persons)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,044,499</TD>
    <TD align="left" valign="bottom" nowrap>(15)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD colspan="9">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Non-Management 5% Shareholders</I></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    FMR Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,831,600</TD>
    <TD align="left" valign="bottom" nowrap>(16)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ICM Asset Management, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,713,800</TD>
    <TD align="left" valign="bottom" nowrap>(17)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Putnam Investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,694,400</TD>
    <TD align="left" valign="bottom" nowrap>(18)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Barrow, Hanley, Mewhinney&nbsp;&#38; Strauss, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,345,520</TD>
    <TD align="left" valign="bottom" nowrap>(19)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prentice Capital Management, L.P.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,323,900</TD>
    <TD align="left" valign="bottom" nowrap>(20)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    S.A.C. Capital Advisors, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,230,900</TD>
    <TD align="left" valign="bottom" nowrap>(21)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Endowment Capital, L.P.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,180,160</TD>
    <TD align="left" valign="bottom" nowrap>(22)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Lisa K. Wagenhals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,122,605</TD>
    <TD align="left" valign="bottom" nowrap>(23)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>*</TD>
    <TD align="left">
    Less than 1% of the outstanding common stock.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Except as otherwise noted, the persons named in the above table
    have sole voting and dispositive power with respect to all
    shares shown as beneficially owned by them. Except as otherwise
    indicated, the business address of each person is
    1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    The percentages shown are calculated based upon
    18,668,711&nbsp;shares of common stock outstanding on
    August&nbsp;15, 2005. The numbers and percentages shown include
    the shares of common stock actually owned as of August&nbsp;15,
    2005, and the shares of common stock that the identified person
    or group had the right to acquire within 60&nbsp;days of such
    date. In calculating the percentage of ownership, all shares of
    common stock that the identified person or group had the right
    to acquire within 60&nbsp;days of August&nbsp;15, 2005, upon the
    exercise of options, are deemed to be outstanding for the
    purpose of computing the percentage of the shares of common
    stock owned by such person or group, but are not deemed to be</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">71
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    outstanding for the purpose of computing the percentage of the
    shares of common stock owned by any other person.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Represents shares of common stock issuable upon exercise of
    stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Represents 1,813,600&nbsp;shares of common stock and vested
    options to acquire 599,999&nbsp;shares of common stock.
    Mr.&nbsp;Wagenhals has sole voting power over all of such shares
    and options and shares dispositive power with respect to
    906,800&nbsp;shares of common stock and 215,805 of the vested
    options. See footnote&nbsp;23.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Includes 4,574&nbsp;shares of common stock held in trust and
    includes 202,226&nbsp;shares of common stock issuable upon
    exercise of stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Represents shares of common stock issuable upon exercise of
    stock options. Mr.&nbsp;Riddiford was appointed as our chief
    financial officer and as a director in October 2004.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    Includes 54,000&nbsp;shares of common stock issuable upon
    exercise of stock options. Mr.&nbsp;Bauman resigned as a
    director in May 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    Includes 251,503&nbsp;shares of common stock issuable upon
    exercise of stock options. Mr.&nbsp;Martin resigned as our chief
    financial officer, secretary and treasurer and as a director in
    October 2004.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(9)&nbsp;</TD>
    <TD align="left">
    Includes 30,000&nbsp;shares of common stock issuable upon
    exercise of stock options. Mr.&nbsp;Bickford resigned as our
    executive vice president&nbsp;&#151; strategic alliances and as
    a director in March 2004.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>(10)&nbsp;</TD>
    <TD align="left">
    Represents shares of common stock issuable upon exercise of
    stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(11)&nbsp;</TD>
    <TD align="left">
    Includes 38,000&nbsp;shares of common stock issuable upon
    exercise of stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(12)&nbsp;</TD>
    <TD align="left">
    Represents shares of common stock issuable upon exercise of
    stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(13)&nbsp;</TD>
    <TD align="left">
    Represents 1,300&nbsp;shares of common stock held in trust and
    includes 36,000&nbsp;shares of common stock issuable upon
    exercise of stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(14)&nbsp;</TD>
    <TD align="left">
    Represents 500&nbsp;shares of common stock held in trust and
    includes 46,000&nbsp;shares of common stock issuable upon
    exercise of stock options.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(15)&nbsp;</TD>
    <TD align="left">
    Amounts listed in the director and executive officer group
    include shares and options held by Mr.&nbsp;Riddiford, our
    current chief financial officer, secretary, and treasurer and a
    director, and exclude shares and options held by
    Messrs.&nbsp;Martin and Bickford, former officers and directors
    of our company.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(16)&nbsp;</TD>
    <TD align="left">
    Represents 1,831,600&nbsp;shares of common stock beneficially
    owned by FMR Corp. or various of its subsidiaries. FMR Corp., or
    various of its subsidiaries, have sole power to dispose of all
    of such shares. The information is based on a Schedule&nbsp;13G
    filed with the Securities and Exchange Commission on
    February&nbsp;14, 2005. The address of FMR Corp. is 82
    Devonshire Street, Boston, Massachusetts 02109.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(17)&nbsp;</TD>
    <TD align="left">
    Represents 1,713,800&nbsp;shares of common stock beneficially
    owned by ICM Asset Management, Inc. ICM has shared power to
    vote&nbsp;875,750 of such shares and shared power to dispose of
    all of such shares. The information is based on a
    Schedule&nbsp;13G filed with the Securities and Exchange
    Commission on February&nbsp;8, 2005. The address of ICM Asset
    Management, Inc. is 601&nbsp;W.&nbsp;Main Avenue,
    Suite&nbsp;600, Spokane, Washington 99201.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(18)&nbsp;</TD>
    <TD align="left">
    Represents 1,694,400&nbsp;shares of common stock beneficially
    owned by Putnam Investments. Putnam Investments has shared power
    to vote&nbsp;488,300 of such shares and shared power to dispose
    of all of such shares. The information is based on a
    Schedule&nbsp;13G filed with the Securities and Exchange
    Commission on February&nbsp;8, 2005. The address of Putnam
    Investments is One Post Office Square, Boston, MA 02109.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(19)&nbsp;</TD>
    <TD align="left">
    Represents 1,345,520&nbsp;shares of common stock beneficially
    owned by Barrow, Hanley, Mewhinney&nbsp;&#38; Strauss, Inc..
    Barrow, Hanley, Mewhinney&nbsp;&#38; Strauss, Inc. has shared
    power to vote&nbsp;325,520 of such shares and sole power to
    dispose of all of such shares. The information is based on a
    Schedule&nbsp;13G filed with the Securities and Exchange
    Commission on February&nbsp;8, 2005. The address of Barrow,
    Hanley, Mewhinney&nbsp;&#38; Strauss, Inc. is One McKinney
    Plaza, 3232 McKinney Avenue, 15th&nbsp;Floor, Dallas, TX
    75204-2929.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">72

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>(20)&nbsp;</TD>
    <TD align="left">
    Represents 1,323,900&nbsp;shares of common stock beneficially
    owned by Prentice Capital Management, L.P.. Prentice Capital
    Management, L.P. has shared power to vote and dispose of all of
    such shares. The information is based on a Schedule&nbsp;13G
    filed with the Securities and Exchange Commission on
    May&nbsp;12, 2005. The address of Prentice Capital Management,
    L.P. is 623&nbsp;Fifth Avenue, 32nd&nbsp;Floor, New York, New
    York 10022.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(21)&nbsp;</TD>
    <TD align="left">
    Represents 1,230,900&nbsp;shares of common stock beneficially
    owned by S.A.C. Capital Advisors, LLC or various of its
    affiliates. SAC Capital Advisors, or various of its affiliates,
    have shared voting and dispositive power of all of such shares.
    The information is based on a Schedule&nbsp;13G filed with the
    Securities and Exchange Commission on February&nbsp;14, 2005.
    The address of S.A.C. Capital Advisors, LLC is 72&nbsp;Cummings
    Point Road, Stamford, Connecticut 06902.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(22)&nbsp;</TD>
    <TD align="left">
    Represents 1,180,160&nbsp;shares of common stock beneficially
    owned by Endowment Capital, L.P. or various of its affiliates.
    Endowment Capital, or various of its affiliates, have shared
    voting and dispositive power of all of such shares. The
    information is based on a Schedule&nbsp;13G filed with the
    Securities and Exchange Commission on April&nbsp;7, 2005. The
    address of Endowment Capital, L.P. is 1105&nbsp;N.&nbsp;Market
    Street, 15th&nbsp;Floor, Wilmington, Delaware 19801.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(23)&nbsp;</TD>
    <TD align="left">
    Represents 906,800&nbsp;shares of common stock and
    215,805&nbsp;shares subject to vested options over which
    Ms.&nbsp;Wagenhals shares voting and/or dispositive power with
    Fred W. Wagenhals.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">73

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<DIV align="left" style="font-size: 10pt;">
<A name='144'></A>
</DIV>

<!-- link1 "FUTURE SHAREHOLDER PROPOSALS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>FUTURE SHAREHOLDER PROPOSALS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the merger is consummated, there will be no public
participation in any future meetings of shareholders of Action
Performance. If the merger is not consummated, however,
shareholders will continue to be entitled to attend and
participate in meetings of shareholders. If the merger is not
consummated, Action Performance will inform its shareholders, by
press release or other means determined reasonable by Action
Performance, of the date by which shareholder proposals must be
received by Action Performance for inclusion in the proxy
materials relating to Action Performance&#146;s 2005 annual
meeting of shareholders, which proposals must comply with the
rules and regulations of the SEC then in effect.
</DIV>

<P align="center" style="font-size: 10pt;">74

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<DIV align="left" style="font-size: 10pt;">
<A name='145'></A>
</DIV>

<!-- link1 "WHERE SHAREHOLDERS CAN FIND MORE INFORMATION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>WHERE SHAREHOLDERS CAN FIND MORE INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Action Performance files annual, quarterly and current reports,
proxy statements and other documents with the SEC under the
Exchange Act. These reports, proxy statements and other
documents contain additional information about Action
Performance and will be made available for inspection and
copying at Action Performance&#146;s executive offices during
regular business hours by any shareholder or a representative of
a shareholder as so designated in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholders may read and copy any reports, statements or other
information filed by Action Performance at the SEC&#146;s public
reference room at 100&nbsp;F&nbsp;Street, N.E.,
Washington,&nbsp;D.C. 20549-5546. You may also obtain copies of
this information by mail from the public reference room of the
SEC, 100&nbsp;F&nbsp;Street, N.E., Washington,&nbsp;D.C.
20549-5546, at prescribed rates. Please call the SEC at
(800)&nbsp;SEC-0330 for further information on the operation of
the public reference room. Action Performance&#146;s SEC filings
made electronically through the SEC&#146;s EDGAR system are
available to the public at the SEC&#146;s website located at
&#147;http://www.sec.gov.&#148; You can also inspect reports,
proxy statements and other information about Action Performance
at the NYSE offices. For further information on obtaining copies
of our public filings from the NYSE, you should call
Mr.&nbsp;David M. Riddiford, our Chief Financial Officer, at
(602)&nbsp;337-3700.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A list of shareholders will be available for inspection by
shareholders of record at Action Performance&#146;s executive
offices at 1480&nbsp;S.&nbsp;Hohokam Drive, Tempe, Arizona 85281
during regular business hours beginning two business days after
notice of the special meeting is given and continuing to the
date of the special meeting. The list of shareholders will be
available at the special meeting or any adjournment thereof. The
opinion of SunTrust Robinson Humphrey that, as of
August&nbsp;29, 2005 and subject to the assumptions,
qualifications and limitations set forth in its opinion, the
consideration to be received by holders of shares of Action
Performance common stock pursuant to the merger agreement is
fair, from a financial point of view, to such holders, a copy of
which is attached to this proxy statement as Appendix&nbsp;B,
will also be available for inspection and copying at the same
address, upon written request by, and at the expense of, the
interested shareholder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>This proxy statement does not constitute an offer to sell, or
a solicitation of an offer to buy, any securities, or the
solicitation of a proxy, in any jurisdiction to or from any
person to whom it is not lawful to make any offer or
solicitation in that jurisdiction. The delivery of this proxy
statement should not create an implication that there has been
no change in the affairs of Action Performance since the date of
this proxy statement or that the information herein is correct
as of any later date.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Shareholders should not rely on information other than that
contained or referred to in this proxy statement. Action
Performance has not authorized anyone to provide information
that is different from that contained in this proxy statement.
This proxy statement is
dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005. No assumption should be made that the information
contained in this proxy statement is accurate as of any date
other than that date, and the mailing of this proxy statement
will not create any implication to the contrary. Notwithstanding
the foregoing, in the event of any material change in any of the
information previously disclosed, Action Performance will, where
relevant and if required by applicable law, update such
information through a supplement to this proxy statement to the
extent necessary.</B>
</DIV>

<P align="center" style="font-size: 10pt;">75
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<DIV align="left" style="font-size: 10pt;">
<A name='146'></A>
</DIV>

<!-- link1 "APPENDIX A" -->

<DIV align="right" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>APPENDIX A</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>The merger agreement has been included to provide you with
information regarding its terms. It is not intended to provide
any other factual information about Action Performance, ISC,
SMI, SMISC or Motorsports Authentics. Such information can be
found elsewhere in this proxy statement and in the public
filings Action Performance, ISC and SMI make with the Securities
and Exchange Commission, which are available without charge at
www.sec.gov.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The merger agreement contains representations and warranties
Action Performance, ISC, SMI, SMISC and Motorsports Authentics
made to each other. The assertions, embodied in those
representations and warranties, are qualified by information in
confidential disclosure schedules that Action Performance, ISC,
SMI SMISC and Motorsports Authentics have exchanged in
connection with signing the merger agreement. While none of
Action Performance, ISC, SMI, SMISC nor Motorsports Authentics
believe that the disclosure schedules contain information that
the securities laws require to be publicly disclosed, the
disclosure schedules do contain information that modifies,
qualifies and creates exceptions to the representations and
warranties set forth in the attached merger agreement.
Accordingly, you should not rely on the representations and
warranties as characterizations of the actual state of facts,
since they are modified by the underlying disclosure schedules.
These disclosure schedules contain information that has been
included in Action Performance&#146;s prior public disclosures,
as well as potential additional non-public information.
Moreover, information concerning the subject matter of the
representations and warranties may have changed since the date
of the merger agreement, which subsequent information may or may
not be fully reflected in Action Performance&#146; public
disclosures.</I>
</DIV>

<P align="center" style="font-size: 10pt;">A-1

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<DIV align="center" style="font-size: 10pt; margin-top: 21pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AGREEMENT AND PLAN OF MERGER</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>dated as of</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>August&nbsp;29, 2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>among</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>SMISC, LLC,</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>MOTORSPORTS AUTHENTICS, INC.,</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>and</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>ACTION PERFORMANCE COMPANIES, INC.</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE 1&nbsp;&nbsp;THE MERGER</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    The Merger</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Closing</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.03
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Effective Time</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.04
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Effects of the Merger</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.05
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Articles of Incorporation and Bylaws</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.06
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Directors</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;2&nbsp;&nbsp;EFFECT OF THE MERGER ON THE CAPITAL
    STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;2.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Effect on Capital Stock</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;2.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Exchange of Certificates</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;3&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;3.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Representations and Warranties of the Company</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;3.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Representations and Warranties of Parent Parties</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;4&nbsp;&nbsp;COVENANTS RELATING TO CONDUCT OF
    BUSINESS</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;4.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conduct of Business</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;4.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No Solicitation</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;5&nbsp;&nbsp;ADDITIONAL AGREEMENTS</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preparation of the Proxy Statement; Shareholders&#146; Meeting</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Access to Information; Confidentiality</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.03
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Commercially Reasonable Efforts</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.04
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Company Stock Options; Warrants</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.05
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnification, Exculpation and Insurance</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.06
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Fees and Expenses</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.07
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Public Announcements</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.08
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Shareholder Litigation</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.09
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Shareholder Agreement Legend</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.10
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Benefit Plans</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.11
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Transfer Taxes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;6&nbsp;&nbsp;CONDITIONS PRECEDENT</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;6.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conditions to Each Party&#146;s Obligation to Effect the Merger</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;6.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conditions to Obligations of Parent and Sub</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;6.03
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conditions to Obligation of the Company</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;6.04
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Frustration of Closing Conditions</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;7&nbsp;&nbsp;TERMINATION, AMENDMENT AND WAIVER</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;7.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Termination</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;7.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Effect of Termination</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;7.03
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;7.04
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Extension; Waiver</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;7.05
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Procedure for Termination or Amendment</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">i

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="8">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    ARTICLE&nbsp;8&nbsp;&nbsp;GENERAL PROVISIONS</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.01
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Nonsurvival of Representations and Warranties</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.02
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Notices</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.03
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Definitions</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.04
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Interpretation</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.05
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consents and Approvals</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.06
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Counterparts</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.07
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Entire Agreement; No Third-Party Beneficiaries</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.08
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Governing Law</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.09
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Assignment</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.10
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Specific Enforcement; Consent to Jurisdiction</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.11
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Severability</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT style="font-variant:SMALL-CAPS">Section&nbsp;8.12
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Guaranty</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">ii
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AGREEMENT AND PLAN OF MERGER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AGREEMENT AND PLAN OF MERGER (this &#147;Agreement&#148;) dated
as of August&nbsp;29, 2005, among SMISC, LLC, a Delaware limited
liability company (&#147;Parent&#148;), Motorsports Authentics,
Inc., an Arizona corporation (&#147;Sub&#148;) and a wholly
owned indirect Subsidiary of Parent, Action Performance
Companies, Inc., an Arizona corporation (the
&#147;Company&#148;), and, for purposes of Section&nbsp;3.02 and
Section&nbsp;8.12 only, the members of Parent listed on the
signature pages hereof (the &#147;Guarantors&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, the Board of Directors of each of the Company and Sub
has adopted, and the Board of Managers of Parent has approved,
this Agreement and the merger of Sub with and into the Company
(the &#147;Merger&#148;), upon the terms and subject to the
conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, par value $.01&nbsp;per
share, of the Company (&#147;Company Common Stock&#148;), other
than shares of Company Common Stock directly owned by Parent,
Sub or the Company, will be converted into the right to receive
$13 in cash;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, simultaneously with the execution and delivery of this
Agreement and as a condition to Parent&#146;s willingness to
enter into this Agreement, Parent and a certain shareholder of
the Company (the &#147;Principal Shareholder&#148;) have entered
into an agreement (the &#147;Shareholder Agreement&#148;)
pursuant to which the Principal Shareholder has agreed to vote
for, approve and adopt this Agreement and to take certain other
actions in furtherance of the consummation of the Merger upon
the terms and subject to the conditions set forth in the
Shareholder Agreement;&nbsp;and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this
Agreement, and subject to the conditions set forth herein, the
parties hereto agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;1
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The Merger
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;1.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The
Merger.</I> Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Arizona
Business Corporation Act, A.R.S. Sections&nbsp;10-001 et seq.
(the &#147;Arizona Code&#148;), Sub shall be merged with and
into the Company at the Effective Time (as defined below).
Following the Effective Time, the separate corporate existence
of Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (the &#147;Surviving
Corporation&#148;) and shall succeed to and assume all the
rights and obligations of Sub in accordance with the Arizona
Code. The parties agree and acknowledge that Parent may
determine prior to the Closing Date to revise the structure or
the mechanics of the form of the merger of the Company with Sub
in a manner to be mutually agreed upon between the Company and
Parent; provided, however, such revised structure shall not
reduce the Merger Consideration or the Option and Warrant
Consideration in any way or change or revise any of the other
covenants or conditions of this Agreement in any meaningful way,
except to the extent that Parent agrees to make the Company and
its stockholders whole for any such change. Each of the parties
agree to use commercially reasonable efforts to take such
actions as may be reasonably requested of each such party to
effect any such revisions to the structure, including executing
any amendments to this Agreement in a form agreed upon among the
parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;1.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Closing.</I>
The closing of the Merger (the &#147;Closing&#148;) will take
place at 10:00&nbsp;a.m. Eastern time on a date to be specified
by the parties, which shall be no later than the second business
day after satisfaction or (to the extent permitted by law)
waiver of the conditions set forth in Article&nbsp;6 (other than
those conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or (to the extent
permitted by law) waiver of those conditions), at the offices of
Baker Botts L.L.P., 1299 Pennsylvania Avenue, N.W.,
Washington,&nbsp;D.C. 20004, unless another time, date or place
is agreed to in writing by Parent and the Company; provided,
however, that if all the conditions set forth in Article&nbsp;6
shall not have been satisfied or (to the extent permitted by
law) waived on such second business day, then the Closing shall
take place on the first business day following the day on which
all such conditions shall have been satisfied or (to
</DIV>

<P align="center" style="font-size: 10pt;">1

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<DIV align="left" style="font-size: 10pt;">
the extent permitted by law) waived. The date on which the
Closing occurs is referred to in this Agreement as the
&#147;Closing Date&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;1.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effective
Time.</I> Subject to the provisions of this Agreement, as soon
as practicable on the Closing Date, the parties shall file with
the Corporation Commission of the State of Arizona articles of
merger (the &#147;Articles of Merger&#148;) executed and
acknowledged by the parties in accordance with the relevant
provisions of the Arizona Code and, as soon as practicable on or
after the Closing Date, the Surviving Corporation shall make all
other filings or recordings required under the Arizona Code. The
Merger shall become effective upon the filing of the Articles of
Merger with the Corporation Commission of the State of Arizona,
or at such other time as Parent and the Company shall agree and
shall specify in the Articles of Merger (the time the Merger
becomes effective being referred to in this Agreement as the
&#147;Effective Time&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;1.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effects
of the Merger.</I> The Merger shall have the effects set forth
in Article&nbsp;10-1106(A) of the Arizona Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section&nbsp;1.05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><I>Articles
of Incorporation and Bylaws.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;The First Amended and Restated Articles of
Incorporation of the Company (the &#147;Company Charter&#148;),
as in effect immediately prior to the Effective Time, shall be
amended at the Effective Time to be in the form of
Exhibit&nbsp;A and, as so amended, such Company Charter shall be
the Articles of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by
applicable law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;The Bylaws of Sub, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter changed or amended as provided
therein or by applicable law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;1.06&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Directors.</I>
Set forth on Schedule&nbsp;1.06 of the Company Disclosure
Schedule is a list of persons who shall be the directors of the
Surviving Corporation until the earlier of their resignation or
removal or until their respective successors are duly elected
and qualified, as the case may be.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;2
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Effect of the Merger on the Capital Stock of the
</DIV>

<DIV align="center" style="font-size: 10pt;">
Constituent Corporations; Exchange of Certificates
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;2.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect
on Capital Stock.</I> At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any
shares of Company Common Stock or any member interests of Parent
or shares of capital stock of Sub:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Capital Stock of Sub.</I> Each issued and
    outstanding share of capital stock of Sub shall be converted
    into and become one validly issued, fully paid and nonassessable
    share of common stock, par value $.01&nbsp;per share, of the
    Surviving Corporation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>Cancellation of Treasury Stock and Parent-Owned
    Stock.</I> Each share of Company Common Stock that is directly
    owned by the Company, Parent or Sub immediately prior to the
    Effective Time shall automatically be cancelled and retired and
    shall cease to exist, and no consideration shall be delivered in
    exchange therefor.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;<I>Conversion of Company Common Stock.</I> Subject to
    Section&nbsp;2.02(e), each share of Company Common Stock issued
    and outstanding immediately prior to the Effective Time (other
    than shares to be cancelled in accordance with
    Section&nbsp;2.01(b)) shall be converted into the right to
    receive $13.00 in cash, without interest (the &#147;Merger
    Consideration&#148;). At the Effective Time, all such shares of
    Company Common Stock shall no longer be outstanding and shall
    automatically be cancelled and retired and shall cease to exist,
    and each holder of a certificate which immediately prior to the
    Effective Time represented any such shares of Company Common
    Stock (each, a &#147;Certificate&#148;) shall cease to have any
    rights with respect thereto, except the right to receive the
    Merger Consideration. The right of any holder of a Certificate
    to receive the Merger Consideration shall be subject to and
    reduced by the amount of any withholding that is required under
    applicable tax law.</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;<I>Options and Warrants.</I> In accordance with and as
    provided in Section&nbsp;5.04, each holder of Company Stock
    Options or Warrants shall be entitled to receive the amounts
    specified in Section&nbsp;5.04(a) and Section&nbsp;5.04(b),
    respectively (the &#147;Option and Warrant Consideration&#148;).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange
of Certificates.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;<I>Paying Agent.</I> Prior to the Effective Time,
Parent shall appoint a bank or trust company reasonably
acceptable to the Company to act as paying agent (the
&#147;Paying Agent&#148;) for the payment of the Merger
Consideration and the Option and Warrant Consideration. At the
Effective Time, Parent shall deposit, or cause the Surviving
Corporation to deposit, with the Paying Agent, for the benefit
of the holders of Certificates, Company Stock Options and
Warrants cash in an amount sufficient to pay the aggregate
Merger Consideration and Option and Warrant Consideration
required to be paid pursuant to Section&nbsp;2.01(c) and
Section&nbsp;2.01(d), respectively (such cash being hereinafter
referred to as the &#147;Exchange Fund&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;<I>Exchange Procedures.</I> As soon as reasonably
practicable after the Effective Time, Parent shall cause the
Paying Agent to mail to each holder of record of shares of
Company Common Stock entitled to receive the Merger
Consideration (i)&nbsp;a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Paying Agent and which shall
contain other provisions as Parent may reasonably specify) and
(ii)&nbsp;instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Each
holder of record of one or more Certificates shall, upon
surrender to the Paying Agent of such Certificate or
Certificates, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required
by the Paying Agent, be entitled to receive in exchange therefor
the amount of cash which the number of shares of Company Common
Stock previously represented by such Certificate shall have been
converted into the right to receive pursuant to
Section&nbsp;2.01(c), and the Certificates so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership
of Company Common Stock which is not registered in the transfer
records of the Company, payment of the Merger Consideration in
accordance with this Section&nbsp;2.02(b) may be made to a
person other than the person in whose name the Certificate so
surrendered is registered if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the
person requesting such payment shall pay any transfer or other
taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of
such Certificate, or establish to the reasonable satisfaction of
Parent that such taxes have been paid or are not applicable.
Until surrendered as contemplated by this Section&nbsp;2.02(b),
each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender
the Merger Consideration pursuant to the provisions of this
Article&nbsp;2. No interest shall be paid or will accrue on any
cash payable to holders of Certificates pursuant to the
provisions of this Article&nbsp;2. As soon as reasonably
practicable after the Effective Time, Parent shall cause the
Paying Agent to make any payments required pursuant to
Section&nbsp;2.01(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;<I>No Further Ownership Rights in Company Common
Stock.</I> All cash paid upon the surrender of Certificates in
accordance with the terms of this Article&nbsp;2 shall be deemed
to have been paid in full satisfaction of all rights pertaining
to the shares of Company Common Stock formerly represented by
such Certificates. At the close of business on the day on which
the Effective Time occurs, the share transfer books of the
Company shall be closed, and there shall be no further
registration of transfers on the share transfer books of the
Surviving Corporation of the shares of Company Common Stock that
were outstanding immediately prior to the Effective Time. If,
after the Effective Time, any Certificate is presented to the
Surviving Corporation for transfer, it shall be cancelled
against delivery of the Merger Consideration to the holder
thereof as provided in this Article&nbsp;2.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;<I>Termination of the Exchange Fund.</I> Any portion of
the Exchange Fund which remains undistributed to the holders of
the Certificates for six months after the Effective Time shall
be delivered to Parent, upon demand, and any holders of the
Certificates who have not theretofore complied with this
Article&nbsp;2 shall thereafter look only to Parent for, and
Parent shall remain liable for, payment of their claim for the
Merger Consideration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;<I>No Liability.</I> None of Parent, Sub, the Company,
the Surviving Corporation or the Paying Agent shall be liable to
any person in respect of any cash from the Exchange Fund
delivered to a public official
</DIV>

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<DIV align="left" style="font-size: 10pt;">
pursuant to any applicable abandoned property, escheat or
similar law. If any Certificate shall not have been surrendered
prior to two years after the Effective Time (or immediately
prior to such earlier date on which any Merger Consideration
would otherwise escheat to or become the property of any
Governmental Entity (as defined below)), any such Merger
Consideration shall, to the extent permitted by applicable law,
become the property of Parent, free and clear of all claims or
interest of any person previously entitled thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;<I>Investment of Exchange Fund.</I> The Paying Agent
shall invest the cash included in the Exchange Fund as directed
by Parent, in (i)&nbsp;securities issued or directly and fully
guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support
thereof), (ii)&nbsp;U.S.&nbsp;dollar denominated (or foreign
currency fully hedged) time deposits, certificates of deposit,
Eurodollar time deposits and Eurodollar certificates of deposit
of (y)&nbsp;any domestic commercial bank of recognized standing
having capital and surplus in excess of $250,000,000 or
(z)&nbsp;any bank whose short-term commercial paper rating from
Standard&nbsp;&#38; Poor&#146;s (&#147;S&#38;P&#148;) is at
least A-1 or the equivalent thereof or from Moody&#146;s
Investor Services, Inc. (&#147;Moody&#146;s&#148;) is at least
P-1 or the equivalent thereof, (iii)&nbsp;U.S.&nbsp;dollar
denominated deposits in and cash management functions with banks
domiciled in the United States of America, (iv)&nbsp;commercial
paper and variable or fixed rate notes issued by or guaranteed
by any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&#38;P or P-1 (or the equivalent thereof)
or better by Moody&#146;s, (v)&nbsp;repurchase agreements with a
bank or trust company or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States
of America and (vi)&nbsp;U.S.&nbsp;Security Exchange Corporation
registered or unregistered money market funds with a rating from
S&#38;P that is at least A-1 or the equivalent thereof or from
Moody&#146;s that is at least P-1 or the equivalent thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;<I>Lost Certificates.</I> If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by
such person of a bond in such amount as Parent may direct as
indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall deliver in
exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration in respect thereof pursuant to
the provisions of this Article&nbsp;2.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;<I>Withholding Rights.</I> Parent, the Surviving
Corporation or the Paying Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of Certificates such amounts as
Parent, the Surviving Corporation or the Paying Agent is
required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended
(the &#147;Code&#148;), or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority by Parent, the
Surviving Corporation or the Paying Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having
been paid to the holder of the Certificates in respect of which
such deduction and withholding was made by Parent, the Surviving
Corporation or the Paying Agent.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;3
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Representations and Warranties
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;3.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Warranties of the Company.</I> Except as set forth in the
disclosure schedule (with specific reference to the particular
Section or subsection of this Agreement to which the information
set forth in such disclosure schedule relates) delivered by the
Company to Parent prior to the execution of this Agreement (the
&#147;Company Disclosure Schedule&#148;), the Company represents
and warrants to Parent and Sub as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Organization, Standing and Corporate Power.</I> Each
    of the Company and its Subsidiaries has been duly organized, and
    is validly existing and in good standing under the laws of the
    jurisdiction of its incorporation or formation, as the case may
    be. Each of the Company and its Subsidiaries have all requisite
    power and authority and possesses all governmental licenses,
    permits, authorizations and approvals necessary to enable it to
    use its corporate or other name and to own, lease or otherwise
    hold and</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    operate its properties and other assets and to carry on its
    business as presently conducted other than such corporate power
    and authority, franchises, licenses, permits, authorizations and
    approvals the lack of which, individually and in the aggregate,
    would not reasonably be expected to have a Material Adverse
    Effect. Each of the Company and its Subsidiaries is duly
    qualified or licensed to do business and is in good standing in
    each jurisdiction in which the nature of its business or the
    ownership, leasing or operation of its properties makes such
    qualification or licensing necessary, such jurisdictions being
    set forth on Section&nbsp;3.01(a) of the Company Disclosure
    Schedule, other than in such jurisdictions where the failure to
    be so qualified or licensed individually or in the aggregate
    would not reasonably be expected to have a Material Adverse
    Effect. The Company has made available to Parent prior to the
    execution of this Agreement complete and accurate copies of the
    Company Charter and its Bylaws (the &#147;Company Bylaws&#148;),
    and the comparable organizational documents of each of its
    Subsidiaries, in each case as amended to the date hereof. The
    Company has made available to Parent complete and accurate
    copies of the minutes (or, in the case of minutes that have not
    yet been finalized, drafts thereof) of all meetings of the
    shareholders of the Company and each of its Subsidiaries, the
    Board of Directors of the Company and each of its Subsidiaries
    and the committees of each such Board of Directors, in each case
    held since October&nbsp;1, 1999 and prior to the date hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>Subsidiaries.</I> Section&nbsp;3.01(b) of the
    Company Disclosure Schedule lists each of the Subsidiaries of
    the Company and, for each such Subsidiary, the state of
    incorporation or formation and, as of the date hereof, each
    jurisdiction in which such Subsidiary is qualified or licensed
    to do business. Except as set forth in Section&nbsp;3.01(b) of
    the Company Disclosure Schedule, all the issued and outstanding
    shares of capital stock of, or other equity interests in, each
    such Subsidiary have been validly issued and are fully paid and
    nonassessable and are owned directly or indirectly by the
    Company free and clear of all pledges, claims, liens, charges,
    encumbrances or security interests of any kind or nature
    whatsoever (collectively, &#147;Liens&#148;), and free of any
    restriction on the right to vote, sell or otherwise dispose of
    such capital stock or other equity interests. Except for the
    capital stock of, or voting securities or equity interests in,
    its Subsidiaries, the Company does not own, directly or
    indirectly, any capital stock of, or other voting securities or
    equity interests in, any corporation, partnership, joint
    venture, association or other entity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;<I>Capital Structure.</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;The authorized capital stock of the Company consists of
    62,500,000&nbsp;shares of Company Common Stock and
    5,000,000&nbsp;shares of preferred stock, par value
    $.01&nbsp;per share (&#147;Company Preferred Stock&#148;). At
    the close of business on August&nbsp;29, 2005,
    (i)&nbsp;18,858,711&nbsp;shares of Company Common Stock were
    issued and outstanding, (ii)&nbsp;190,000&nbsp;shares of Company
    Common Stock were held by the Company in its treasury,
    (iii)&nbsp;2,144,606&nbsp;shares of Company Common Stock were
    subject to outstanding Company Stock Options under the
    Company&#146;s 1993 Stock Option Plan, 1998 Non-Qualified Stock
    Option Plan, 1999 Employee Stock Purchase Plan, and 2000 Stock
    Option Plan, each as amended to the date hereof (such plans,
    collectively, the &#147;Company Stock Plans&#148;) ,
    (iv)&nbsp;no shares of Company Preferred Stock were issued or
    outstanding or were held by the Company as treasury shares, and
    (v)&nbsp;warrants to acquire 565,000&nbsp;shares of Company
    Common Stock from the Company pursuant to the warrant agreements
    set forth on Section&nbsp;3.01(c) of the Company Disclosure
    Schedule and previously delivered in complete and correct form
    to Parent (the &#147;Warrants&#148;) were issued and outstanding.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;Except as set forth above in this
    Section&nbsp;3.01(c), at the close of business on
    August&nbsp;29, 2005, no shares of capital stock or other voting
    securities or equity interests of the Company were issued,
    reserved for issuance or outstanding. There are no outstanding
    stock appreciation rights, &#147;phantom&#148; stock rights,
    performance units, rights to receive shares of Company Common
    Stock on a deferred basis or other rights (other than Company
    Stock Options and the Warrants) that are linked to the value of
    Company Common Stock (collectively, &#147;Company Stock-Based
    Awards&#148;). Section&nbsp;3.01(c) of the Company Disclosure
    Schedule sets forth a complete and accurate list, as of
    August&nbsp;29, 2005, of all outstanding options to purchase
    shares of Company Common Stock (collectively, &#147;Company
    Stock Options&#148;) under the Company Stock Plans (including,
    but not limited to, the Company&#146;s 1999 Employee Stock
    Purchase Plan), and all outstanding Warrants, the</TD>
</TR>

</TABLE>

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<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    number of shares of Company Common Stock (or other stock)
    subject thereto, the grant dates, expiration dates, exercise or
    base prices (if applicable) and vesting schedules thereof and
    the names of the holders thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;There are no outstanding shares of Company Common
    Stock in respect of which the Company has a right under
    specified circumstances to repurchase such shares at a fixed
    purchase price.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;All outstanding Company Stock Options are evidenced by
    stock option agreements, restricted stock purchase agreements or
    other award agreements, in each case in the forms previously
    delivered or made available to Parent, and no stock option
    agreement, restricted stock purchase agreement or other award
    agreement contains terms that are materially inconsistent with
    such forms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;Each Company Stock Option may, by its terms, be
    cancelled in connection with the transactions contemplated
    hereby for a lump sum payment in accordance with and to the
    extent required by Section&nbsp;5.04(a). All Warrants may, by
    their terms, be cancelled in exchange for a lump sum cash
    payment in accordance with and to the extent required by
    Section&nbsp;5.04(b).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vi)&nbsp;All outstanding shares of capital stock of the Company
    are, and all shares which may be issued prior to the Effective
    Time pursuant to the Company Stock Options or the Warrants will
    be when issued in accordance with the terms thereof, duly
    authorized, validly issued, fully paid and nonassessable and not
    subject to preemptive rights.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vii)&nbsp;There are no bonds, debentures, notes or other
    indebtedness of the Company having the right to vote (or
    convertible into, or exchangeable for, securities having the
    right to vote) on any matters on which shareholders of the
    Company may vote.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (viii)&nbsp;Except as set forth above in this
    Section&nbsp;3.01(c) or in Section&nbsp;3.01(c) of the Company
    Disclosure Schedule, (x)&nbsp;there are not issued, reserved for
    issuance or outstanding (A)&nbsp;any shares of capital stock or
    other voting securities or equity interests of the Company,
    (B)&nbsp;any securities of the Company convertible into or
    exchangeable or exercisable for shares of capital stock or other
    voting securities or equity interests of the Company, or
    (C)&nbsp;any warrants, calls, options or other rights to acquire
    from the Company or any of its Subsidiaries, and no obligation
    of the Company or any of its Subsidiaries to issue, any capital
    stock, voting securities, equity interests or securities
    convertible into or exchangeable or exercisable for capital
    stock or voting securities of the Company and (y)&nbsp;there are
    not any outstanding obligations of the Company or any of its
    Subsidiaries to repurchase, redeem or otherwise acquire any such
    securities or to issue, deliver or sell, or cause to be issued,
    delivered or sold, any such securities. Neither the Company nor
    any of its Subsidiaries is a party to any voting agreement with
    respect to the voting of any such securities.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ix)&nbsp;Except as set forth above in this Section&nbsp;3.01(c)
    or Section&nbsp;3.01(c) of the Company Disclosure Schedule,
    there are no outstanding (1)&nbsp;securities of the Company or
    any of its Subsidiaries convertible into or exchangeable or
    exercisable for shares of capital stock or voting securities or
    equity interests of any Subsidiary of the Company,
    (2)&nbsp;warrants, calls, options or other rights to acquire
    from the Company or any of its Subsidiaries, and no obligation
    of the Company or any of its Subsidiaries to issue, any capital
    stock, voting securities, equity interests or securities
    convertible into or exchangeable or exercisable for capital
    stock or voting securities of any Subsidiary of the Company or
    (3)&nbsp;obligations of the Company or any of its Subsidiaries
    to repurchase, redeem or otherwise acquire any such outstanding
    securities or to issue, deliver or sell, or cause to be issued,
    delivered or sold, any such securities.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;<I>Authority.</I> The Company has all requisite
    corporate power and authority to execute and deliver this
    Agreement and, subject to receipt of the Shareholder Approval,
    to consummate the transactions contemplated by this Agreement.
    The execution and delivery of this Agreement by the Company and
    the consummation by the Company of the transactions contemplated
    by this Agreement have been duly authorized by all necessary
    corporate action on the part of the Company and no other</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
    corporate proceedings on the part of the Company are necessary
    to authorize this Agreement or to consummate the transactions
    contemplated hereby, subject, in the case of the consummation of
    the Merger, to the obtaining of the Shareholder Approval. This
    Agreement has been duly executed and delivered by the Company
    and, assuming the due authorization, execution and delivery by
    each of the other parties hereto, constitutes a legal, valid and
    binding obligation of the Company, enforceable against the
    Company in accordance with its terms, subject to bankruptcy,
    insolvency, fraudulent transfer, reorganization, moratorium and
    similar laws of general applicability relating to or affecting
    creditors&#146; rights, and to general equity principles. The
    Board of Directors of the Company, at a meeting duly called and
    held at which all directors of the Company were present, duly
    and unanimously adopted resolutions (i)&nbsp;adopting this
    Agreement and approving the Merger and the other transactions
    contemplated by this Agreement, (ii)&nbsp;determining that it is
    in the best interests of the shareholders of the Company that
    the Company enter into this Agreement and consummate the Merger
    and the other transactions contemplated by this Agreement on the
    terms and subject to the conditions set forth in this Agreement,
    (iii)&nbsp;directing that the adoption of this Agreement be
    submitted as promptly as practicable to a vote at a meeting of
    the shareholders of the Company and (iv)&nbsp;recommending that
    the shareholders of the Company approve this Agreement, which
    resolutions have not been subsequently rescinded, modified or
    withdrawn in any way.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (e)&nbsp;<I>Noncontravention.</I> Except as set forth in
    Section&nbsp;3.01(e) of the Company Disclosure Schedule, the
    execution and delivery of this Agreement do not, and the
    consummation of the Merger and the other transactions
    contemplated by this Agreement and compliance with the
    provisions of this Agreement will not, conflict with, or result
    in any violation or breach of, or default (with or without
    notice or lapse of time, or both) under, or give rise to a right
    of termination, cancellation or acceleration of any obligation
    or to the loss of a benefit under, or result in the creation of
    any Lien in or upon any of the properties or other assets of the
    Company or any of its Subsidiaries under:</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;the Company Charter or the Company Bylaws or the
    comparable organizational documents of any of the Company&#146;s
    Subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;any loan or credit agreement, bond, debenture, note,
    mortgage, indenture, lease or other contract, agreement,
    obligation, commitment, arrangement, understanding, instrument,
    permit, franchise or license, whether oral or written (each,
    including all amendments thereto, a &#147;Contract&#148;), to
    which the Company or any of its Subsidiaries is a party or any
    of their respective properties or other assets is
    subject;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;subject to the governmental filings, the obtaining of
    the Shareholder Approval and the other matters referred to in
    the following sentence and in Section&nbsp;3.01(f) below, any
    (A)&nbsp;statute, law, ordinance, rule or regulation or
    (B)&nbsp;order, writ, injunction, decree, judgment or
    stipulation, in each case applicable to the Company or any of
    its Subsidiaries or their respective properties or other assets;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
     other than, in the case of clauses&nbsp;(ii) and (iii), any
    such conflicts, violations, breaches, defaults, rights, losses
    or Liens that individually or in the aggregate would not
    reasonably be expected to have a Material Adverse Effect.</TD>
</TR>

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    <TD width="97%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (f)&nbsp;<I>Consents.</I> Except as set forth in
    Section&nbsp;3.01(f) of the Company Disclosure Schedule, no
    consent, approval, order or authorization of, action by or in
    respect of, or registration, declaration or filing with, any
    Federal, state, local or foreign government, any court,
    administrative, regulatory or other governmental agency,
    commission or authority or any non-governmental self-regulatory
    agency, commission or authority (each, a &#147;Governmental
    Entity&#148;) is required to be obtained or made by or with
    respect to the Company or any of its Subsidiaries in connection
    with the execution and delivery of this Agreement by the Company
    or the consummation of the Merger or the other transactions
    contemplated by this Agreement, except for:</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;the filing of a premerger notification and report form
    by the Company under the Hart-Scott-Rodino
    Antitrust&nbsp;Improvements Act of 1976, as amended, and the
    rules and regulations</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
    thereunder (the &#147;HSR Act&#148;), and the receipt,
    termination or expiration, as applicable, of approvals or
    waiting periods required under the HSR Act or any other
    applicable competition, merger control, antitrust or similar law
    or regulation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;the filing with the United States Securities and
    Exchange Commission (the &#147;SEC&#148;) of (A)&nbsp;a proxy
    statement relating to the approval by the shareholders of the
    Company of this Agreement (as amended or supplemented from time
    to time, the &#147;Proxy Statement&#148;) and (B)&nbsp;such
    reports under Section&nbsp;13(a), 13(d), 15(d) or 16(a) of the
    Securities Exchange Act of 1934, as amended (the &#147;Exchange
    Act&#148;), as may be required in connection with this Agreement
    and the transactions contemplated by this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;the filing of the Articles of Merger with the
    Corporation Commission of the State of Arizona and appropriate
    documents with the relevant authorities of other states in which
    the Company or any of its Subsidiaries is qualified to do
    business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;any filings required under the rules and regulations
    of the New York Stock Exchange;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;such other consents, approvals, orders, authorizations,
    registrations, declarations and filings the failure of which to
    be obtained or made individually or in the aggregate would not
    reasonably be expected to have a Material Adverse Effect.</TD>
</TR>

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    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (g)&nbsp;<I>Company SEC Documents.</I> Except as set forth in
    Section&nbsp;3.01(g) of the Company Disclosure Schedule, the
    Company has filed all reports, schedules, forms, statements and
    other documents (including exhibits and other information
    incorporated therein) with the SEC required to be filed by the
    Company since October&nbsp;1, 2002 (the &#147;Company SEC
    Documents&#148;). As of their respective dates, the Company SEC
    Documents complied in all material respects with the
    requirements of the Securities Act of 1933, as amended (the
    &#147;Securities Act&#148;), or the Securities Exchange Act of
    1934, as amended (the &#147;Exchange Act&#148;), as the case may
    be, and the rules and regulations of the SEC promulgated
    thereunder applicable to such Company SEC Documents, and none of
    the Company SEC Documents contained any untrue statement of a
    material fact or omitted to state a material fact required to be
    stated therein or necessary in order to make the statements
    therein, in light of the circumstances under which they were
    made, not misleading. The Company SEC Documents identify all
    transactions required to bedisclosed pursuant to Item&nbsp;404
    of Regulation&nbsp;S-K (&#147;Related Party Transactions&#148;
    and any person described in Item&nbsp;404 of
    Regulation&nbsp;S-K, a &#147;Related Party&#148;). As of the
    date hereof, management has not determined that it will have, as
    of September&nbsp;30, 2005, a material weakness in its internal
    controls. Except to the extent that information contained in any
    Company SEC Document has been revised or superseded by a
    later-filed Company SEC Document, none of the Company SEC
    Documents contains any untrue statement of a material fact or
    omits to state any material fact required to be stated therein
    or necessary in order to make the statements therein, in light
    of the circumstances under which they were made, not misleading.
    The consolidated financial statements (including the related
    notes) of the Company included in the Company SEC Documents
    comply as to form in all material respects with applicable
    accounting requirements and the published rules and regulations
    of the SEC with respect thereto, have been prepared in
    accordance with generally accepted accounting principles in the
    United States (&#147;GAAP&#148;) (except, in the case of
    unaudited statements, as permitted by Form&nbsp;10-Q of the SEC)
    applied on a consistent basis during the periods involved
    (except as may be indicated in the notes thereto) and fairly
    present, in all material respects, the consolidated financial
    position of the Company and its consolidated Subsidiaries as of
    the dates thereof and the consolidated results of their
    operations and cash flows for the periods shown (subject, in the
    case of unaudited statements, to normal and recurring year-end
    audit adjustments). None of the Subsidiaries of the Company are,
    or have at any time been, subject to the reporting requirements
    of Sections&nbsp;13(a) and 15(d) of the Exchange Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (h)&nbsp;<I>No Additional Liabilities.</I> Except (I)&nbsp;as
    set forth in the most recent financial statements included in
    the Company SEC Documents filed or furnished by the Company
    during the past 12&nbsp;months and publicly available prior to
    the date of this Agreement (the &#147;Filed Company SEC
    Documents&#148;), (ii)&nbsp;incurred since June&nbsp;30, 2005 in
    the ordinary course of business, or (iii)&nbsp;set forth in
    Section&nbsp;3.01(h) of the Company Disclosure Schedule, neither
    the Company nor any of its Subsidiaries has any liabilities</TD>
</TR>

</TABLE>

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    or obligations of any nature (whether accrued, absolute,
    contingent or otherwise) which individually or in the aggregate
    would reasonably be expected to have a Material Adverse Effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;<I>Information Supplied.</I> None of the information
    supplied or to be supplied by the Company specifically for
    inclusion or incorporation by reference in the Proxy Statement
    will, at the date it is first mailed to the shareholders of the
    Company and at the time of the Shareholders&#146; Meeting,
    contain any untrue statement of a material fact or omit to state
    any material fact required to be stated therein or necessary in
    order to make the statements therein, in light of the
    circumstances under which they are made, not misleading, except
    that no representation or warranty is made by the Company with
    respect to statements made or incorporated by reference therein
    based on information supplied by Parent or Sub in writing
    specifically for inclusion or incorporation by reference in the
    Proxy Statement. The Proxy Statement will comply as to form in
    all material respects with the requirements of the Exchange Act
    and the rules and regulations thereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (j)&nbsp;<I>Absence of Certain Changes or Events.</I> Except for
    liabilities incurred in connection with this Agreement or as set
    forth in Section&nbsp;3.01(j) of the Company Disclosure Schedule
    or included in Filed Company SEC Documents, since June&nbsp;30,
    2005, the Company and its Subsidiaries have conducted their
    respective businesses only in the ordinary course consistent
    with past practice, and from such date until the date hereof
    there has not been:</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;any event, change, effect, development, condition or
    occurrence that, individually or in the aggregate, would
    reasonably be expected to have a Material Adverse Effect,
    including but not limited to, other than as referenced in any
    Filed Company SEC Document, any failure by the Company to
    preserve intact its current business organizations, keep
    available the services of its officers, employees and
    consultants and preserve its relationships with customers,
    suppliers, licensors, licensees, distributors and others having
    business dealings with it;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;any declaration, setting aside or payment of any
    dividend or other distribution (whether in cash, stock or
    property) with respect to any capital stock of the Company or
    any of its Subsidiaries, other than dividends or distributions
    by a direct or indirect wholly owned Subsidiary of the Company
    to its shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;any purchase, redemption or other acquisition by the
    Company or any of its Subsidiaries of any shares of capital
    stock or any other securities of the Company or any of its
    Subsidiaries or of any options, warrants, calls or rights to
    acquire such shares or other securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;any split, combination or reclassification of any
    capital stock of the Company or any of its Subsidiaries or any
    issuance or the authorization of any issuance of any other
    securities in respect of, in lieu of or in substitution for
    shares of their respective capital stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;(A)&nbsp;any granting by the Company or any of its
    Subsidiaries to any current or former director, officer,
    employee or consultant of the Company or its Subsidiaries of any
    increase in compensation, bonus or fringe or other benefits or
    any granting of any type of compensation or benefits to any
    current or former director, officer, employee or consultant not
    previously receiving or entitled to receive such type of
    compensation or benefit, except for normal increases in cash
    compensation to non-executive employees (including, with respect
    to new hires, cash bonus opportunities and compensation) in the
    ordinary course of business consistent with past practice or as
    was required under any Company Benefit Agreement or Company
    Benefit Plan in effect as of the date of the most recent
    financial statements included in the Filed Company SEC
    Documents, (B)&nbsp;any granting by the Company or any of its
    Subsidiaries to any current or former director, officer,
    employee or consultant of the Company or any of its Subsidiaries
    of any right to receive any increase in severance or termination
    pay, except (x)&nbsp;in the ordinary course of business
    consistent with past practice in connection with new hires to
    replace departed employees and (y)&nbsp;in the ordinary course
    of business consistent with past practice in connection with
    promotions made in the ordinary course of business consistent
    with past practice for non-executive employees, (C)&nbsp;any
    entry into, adoption by, amendment by or termination by, the
    Company or any of its Subsidiaries of (1)&nbsp;any</TD>
</TR>

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    <TD align="left">
    employment, deferred compensation, severance, change of control,
    termination or indemnification agreement or any other agreement,
    plan or policy (including the Company Benefit Plans), or any
    consulting agreement with aggregate amounts paid or payable in
    excess of $50,000, with or involving any current or former
    director, officer, employee or consultant of the Company or any
    of its Subsidiaries other than any of the foregoing entered
    into, adopted, amended or terminated in the ordinary course of
    business consistent with past practice with respect to
    non-executive employees, or (2)&nbsp;any agreement with any
    current or former director, officer, employee or consultant of
    the Company or any of its Subsidiaries the benefits of which are
    contingent, or the terms of which are materially altered, upon
    the occurrence of a transaction involving the Company of a
    nature contemplated by this Agreement (all such agreements under
    this clause&nbsp;(C), collectively, &#147;Company Benefit
    Agreements&#148;), or (D)&nbsp;any payment of any benefit under,
    or the grant of any award under, or any material amendment to,
    or termination of, any bonus, incentive, performance or other
    compensation plan or arrangement, Company Benefit Agreement or
    Company Benefit Plan (including in respect of stock options,
    &#147;phantom&#148; stock, stock appreciation rights, restricted
    stock, &#147;phantom&#148; stock rights, restricted stock units,
    deferred stock units, performance stock units or other
    stock-based or stock-related awards or the removal or
    modification of any restrictions in any Company Benefit
    Agreement or Company Benefit Plan or awards made thereunder)
    except as required to comply with applicable law or any Company
    Benefit Agreement or Company Benefit Plan in effect as of the
    date of the most recent audited financial statements included in
    the Filed Company SEC Documents;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vi)&nbsp;any sale, lease, transfer, assignment or other
    disposition of any assets material to the business and
    operations of the Company and its Subsidiaries as presently
    conducted;</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vii)&nbsp;any incurrence of indebtedness for borrowed money or
    guarantee of any such indebtedness of another person, other than
    the incurrence of indebtedness under the Amended and Restated
    Credit Agreement dated as of June&nbsp;30, 2004 by and among the
    Company and certain subsidiaries and affiliates, as guarantors,
    and Bank One, N.A., as amended as of the date hereof;</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (viii)&nbsp;any transfer, assignment, disposition, material
    amendment, termination or other material change to any Contract
    between the Company or a Subsidiary of the Company and any
    driver, team owner, sanctioning body, automobile manufacturer or
    other material licensor;</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ix)&nbsp;any damage, destruction or loss, whether or not
    covered by insurance, that individually or in the aggregate
    would reasonably be expected to have a Material Adverse Effect;</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (x)&nbsp;any change in accounting methods, principles or
    practices by the Company materially affecting its assets,
    liabilities or businesses;&nbsp;or</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xi)&nbsp;any material tax election by the Company or any
    settlement or compromise of any material income tax liability by
    the Company.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (k)&nbsp;<I>Litigation.</I> Except as set forth in
    Section&nbsp;3.01(k) of the Company Disclosure Schedule, there
    is no suit, action or proceeding pending or, to the Knowledge of
    the Company, threatened against or affecting the Company or any
    of its Subsidiaries or any of their respective assets that
    individually or in the aggregate would reasonably be expected to
    have a Material Adverse Effect, nor is there any judgment,
    decree, injunction, rule or order of any Governmental Entity or
    arbitrator outstanding against, or, to the Knowledge of the
    Company, investigation by any Governmental Entity involving, the
    Company or any of its Subsidiaries or, to the Company&#146;s
    Knowledge, any of their respective assets that individually or
    in the aggregate would reasonably be expected to have a Material
    Adverse Effect.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (l)&nbsp;<I>Contracts.</I> Except as disclosed in the Filed
    Company SEC Documents, neither the Company nor any of its
    Subsidiaries is a party to, and none of their respective
    properties or other assets is subject to, any contract or
    agreement that is of a nature required to be filed as an exhibit
    to a report or filing under the Securities Act or the Exchange
    Act and the rules and regulations promulgated thereunder. None
    of the Company, any of its Subsidiaries or, to the Knowledge of
    the Company, any party thereto is in violation of or in default
    under (nor does there exist any condition which upon the passage
    of time or the</TD>
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    giving of notice or both could cause such a violation of or
    default under) any Contract to which it is a party or by, to the
    Knowledge of the Company, which it or any of its properties or
    other assets is bound, except for violations or defaults that
    individually or in the aggregate would not reasonably be
    expected to have a Material Adverse Effect. Except as set forth
    in Section&nbsp;3.01(l) of the Company Disclosure Schedule,
    neither the Company nor any of its Subsidiaries has entered into
    any Contract with any Affiliate of the Company that is currently
    in effect other than agreements that are disclosed in the Filed
    Company SEC Documents. Except as set forth in
    Section&nbsp;3.01(l) of the Company Disclosure Schedule, neither
    the Company nor any of its Subsidiaries is a party to or
    otherwise bound by any agreement or covenant restricting the
    Company&#146;s or any of its Subsidiaries&#146; ability to
    compete or by any agreement or covenant restricting in any
    respect the license, marketing, co-promotion, manufacturing,
    research, development, distribution, training, sale or supply of
    products or services of the Company or any of its Subsidiaries.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (m)&nbsp;<I>Compliance with Laws.</I> Except with respect to
    Environmental Laws, the Employee Retirement Income Security Act
    of 1974, as amended (&#147;ERISA&#148;) and taxes, which are the
    subjects of Sections&nbsp;3.01(n), 3.01(p) and 3.01(r),
    respectively, each of the Company and its Subsidiaries is in
    compliance with all statutes, laws, ordinances, rules,
    regulations, judgments, orders and decrees of any Governmental
    Entity applicable to it, its properties or other assets or its
    business or operations (collectively, &#147;Legal
    Provisions&#148;), except for instances of noncompliance or
    possible noncompliance that individually or in the aggregate
    would not reasonably be expected to have a Material Adverse
    Effect. Each of the Company and its Subsidiaries has in effect
    all approvals, authorizations, certificates, filings,
    franchises, licenses, notices, permits and rights of or with all
    Governmental Entities (collectively, &#147;Permits&#148;)
    necessary for it to own, lease or operate its properties and
    other assets and to carry on its business and operations as
    presently conducted, except for such Permits the absence of
    which, individually or in the aggregate, would not reasonably be
    expected to have a Material Adverse Effect. No default has
    occurred under, and there has been no violation of, any such
    Permit, except for any such default or violations that,
    individually or in the aggregate, would not reasonably be
    expected to have a Material Adverse Effect. The consummation of
    the Merger would not cause the revocation or cancellation of any
    such Permit, other than where such revocation or cancellation
    would not reasonably be expected to have a Material Adverse
    Effect. To the Company&#146;s Knowledge, except as set forth in
    Section&nbsp;3.01(m) of the Company Disclosure Schedule, during
    the five years immediately preceding the date hereof, neither
    the Company nor any of its Subsidiaries, nor any employee of the
    Company or any Subsidiary of the Company, nor any other person
    acting on behalf of the Company, any such Subsidiary or any such
    employee, has given or agreed to give, directly or indirectly,
    any gift or similar benefit to any dealer, supplier, customer,
    governmental employee or other person who is or may be in a
    position to help or hinder the Company or any of its
    Subsidiaries (or assist the Company or any of its Subsidiaries
    in connection with any actual or proposed transaction), which
    might subject the Company or any of its Subsidiaries to any
    damage or penalty in any civil, criminal or governmental
    litigation or proceeding and which, if not continued in the
    future, would be reasonably likely to have a Material Adverse
    Effect. Except as set forth in Section&nbsp;3.01(m) of the
    Company Disclosure Schedule, neither the Company nor any of its
    Subsidiaries, nor, to the Knowledge of the Company, any
    director, officer, agent or employee of the Company or any of
    its Subsidiaries, has taken any action which would cause the
    Company or any of its Subsidiaries to be in violation of the
    Foreign Corrupt Practices Act of 1977 or any applicable law of
    similar effect, except for such violations that, individually or
    in the aggregate, would not reasonably be expected to result in
    a criminal proceeding against the Company.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (n)&nbsp;<I>Environmental Matters.</I></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;Except for those matters that individually or in the
    aggregate would not reasonably be expected to have a Material
    Adverse Effect: (A)&nbsp;each of the Company and its
    Subsidiaries is, and has been, in compliance with all applicable
    Environmental Laws and has obtained and complied with all
    material Permits required under any Environmental Laws to own,
    lease or operate its properties or other assets and to carry on
    its business and operations as presently conducted;
    (B)&nbsp;there have been no Releases or threatened Releases of
    Hazardous Materials in, on, from, under</TD>
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    <TD align="left">
    or affecting any properties currently or formerly owned, leased
    or operated by the Company or any of its Subsidiaries that
    reasonably would be expected to form the basis of any claim
    against, or liability or other loss incurred by, the Company or
    any of its Subsidiaries or against or by any person whose
    liabilities for such claims the Company or any Subsidiary has,
    or may have, retained or assumed, either contractually or by
    operation of law; (C)&nbsp;no investigation, suit, claim,
    action, allegation or proceeding is pending, or to the Knowledge
    of the Company, threatened against or affecting the Company or
    any of its Subsidiaries relating to or arising under
    Environmental Laws, and neither the Company nor any of its
    Subsidiaries has received any written notice of any such
    investigation, suit, claim, action, allegation or proceeding;
    and (D)&nbsp;neither the Company nor any of its Subsidiaries has
    retained or assumed by Contract or operation of law or
    otherwise, any obligation or liability that would reasonably be
    expected to form the basis of any claim, liability or other loss
    arising under Environmental Laws.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;The term &#147;Environmental Laws&#148; means all
    Federal, state, local and foreign laws (including the common
    law), statutes, rules, regulations, codes, ordinances, orders,
    decrees, judgments, injunctions, notices, Permits, treaties or
    binding agreements issued, promulgated or entered into by any
    Governmental Entity, relating in any way to the environment,
    preservation or reclamation of natural resources or threatened,
    endangered or other special status species, the presence,
    management, Release or threat of Release of, or exposure to,
    Hazardous Materials, or to human health and safety. The term
    &#147;Hazardous Materials&#148; means (1)&nbsp;petroleum
    products and by-products, asbestos and asbestos-containing
    materials, urea formaldehyde foam insulation, medical or
    infectious wastes, polychlorinated biphenyls, radon gas,
    chlorofluorocarbons and all other ozone-depleting substances or
    (2)&nbsp;any chemical, material, substance, waste, pollutant or
    contaminant for which the use, treatment, storage, management,
    release or disposal is prohibited, limited or regulated by or
    pursuant to any Environmental Law. The term &#147;Release&#148;
    means any spilling, leaking, pumping, pouring, emitting,
    emptying, discharging, injecting, escaping, leaching, dumping,
    disposing or migrating into or through the environment or any
    natural or man-made structure.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (o)&nbsp;<I>Absence of Changes in Company Benefit Plans; Labor
    Relations.</I> Since the date of the most recent audited
    financial statements included in the Filed Company SEC Documents
    to the date of this Agreement, there has not been any adoption
    or amendment, in any material respect, by the Company or any of
    its Subsidiaries of any collective bargaining agreement or
    material employment, bonus, pension, profit sharing, deferred
    compensation, incentive compensation, stock ownership, stock
    purchase, stock appreciation, restricted stock, stock option,
    &#147;phantom&#148; stock, performance, retirement, thrift,
    savings, stock bonus, paid time off, perquisite, fringe benefit,
    vacation, severance, disability, death benefit, hospitalization,
    medical, welfare benefit or other plan, program, policy,
    arrangement or understanding (whether or not legally binding)
    maintained, contributed to or required to be maintained or
    contributed to by the Company or any of its Subsidiaries or any
    other person or entity that, together with the Company, is
    treated as a single employer under Section&nbsp;414(b), (c),
    (m)&nbsp;or (o)&nbsp;of the Code (each, a &#147;Commonly
    Controlled Entity&#148;), in each case providing benefits to any
    current or former director, officer, employee or consultant of
    the Company or any of its Subsidiaries (collectively, the
    &#147;Company Benefit Plans&#148;), or any material change in
    any actuarial or other assumption used to calculate funding
    obligations with respect to any Company Pension Plans, or any
    material change in the manner in which contributions to any
    Company Pension Plans are made or the basis on which such
    contributions are determined. Except as disclosed in the Filed
    Company SEC Documents or in Section&nbsp;3.01(o) of the Company
    Disclosure Schedule, there exist no currently binding Company
    Benefit Agreements. There are no collective bargaining or other
    labor union agreements to which the Company or any of its
    Subsidiaries is a party or by which the Company or any of its
    Subsidiaries is bound. None of the employees of the Company or
    any of its Subsidiaries are represented by any union with
    respect to their employment by the Company or such Subsidiary.
    Since October&nbsp;1, 2004, neither the Company nor any of its
    Subsidiaries has experienced any material labor disputes, union
    organization attempts or work stoppages, slowdowns or lockouts
    due to labor disagreements.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (p)&nbsp;<I>Erisa Compliance.</I></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;Section&nbsp;3.01(p)(i) of the Company Disclosure
    Schedule contains a complete and accurate list of each Company
    Benefit Plan that is an &#147;employee pension benefit
    plan&#148; (as defined in Section&nbsp;3(2) of ERISA) (sometimes
    referred to herein as a &#147;Company Pension Plan&#148;), each
    Company Benefit Plan that is an &#147;employee welfare benefit
    plan&#148; (as defined in Section&nbsp;3(1) of ERISA) and all
    other material Company Benefit Plans. The Company has provided
    or made available to Parent complete and accurate copies of
    (A)&nbsp;each Company Benefit Plan (or, in the case of any
    unwritten Company Benefit Plans, descriptions thereof),
    (B)&nbsp;the two most recent annual reports on Form&nbsp;5500
    required to be filed with the Internal Revenue Service (the
    &#147;IRS&#148;) with respect to each Company Benefit Plan (if
    any such report was required), (C)&nbsp;the most recent summary
    plan description for each Company Benefit Plan for which such a
    summary plan description is required and (D)&nbsp;each trust
    agreement and insurance or group annuity contract relating to
    any Company Benefit Plan. Each Company Benefit Plan has been
    administered in all material respects in accordance with its
    terms. The Company, its Subsidiaries and all the Company Benefit
    Plans are all in compliance with the applicable provisions of
    ERISA, the Code and all other applicable laws, including laws of
    foreign jurisdictions, and the terms of all collective
    bargaining agreements, except for any instances of noncompliance
    that, individually or in the aggregate, would not be reasonably
    expected to have a Material Adverse Effect.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;All Company Pension Plans intended to be tax-qualified
    have received favorable determination letters from the IRS with
    respect to &#147;TRA&#148; (as defined in Section&nbsp;1 of Rev.
    Proc. 93-39), and have timely filed with the IRS determination
    letter applications with respect to &#147;GUST&#148; (as defined
    in Section&nbsp;1 of Notice 2001-42), to the effect that such
    Company Pension Plans are qualified and exempt from Federal
    income taxes under Sections&nbsp;401(a) and 501(a),
    respectively, of the Code, no such determination letter has been
    revoked (nor, to the Knowledge of the Company, has revocation
    been threatened) and no event has occurred since the date of the
    most recent determination letter or application therefor
    relating to any such Company Pension Plan that would reasonably
    be expected to adversely affect the qualification of such
    Company Pension Plan or materially increase the costs
    (individually or in the aggregate) relating thereto or require
    security under Section&nbsp;307 of ERISA. All Company Pension
    Plans required to have been approved by any foreign Governmental
    Entity have been so approved, no such approval has been revoked
    (nor, to the Knowledge of the Company, has revocation been
    threatened) and no event has occurred since the date of the most
    recent approval or application therefor relating to any such
    Company Pension Plan that would reasonably be expected to
    materially affect any such approval relating thereto or
    materially increase the costs (individually or in the aggregate)
    relating thereto. The Company has delivered to Parent a complete
    and accurate copy of the most recent determination letter
    received with respect to each Company Pension Plan, as well as a
    complete and accurate copy of each pending application for a
    determination letter, if any. The Company has also provided to
    Parent a complete and accurate list of all amendments to any
    Company Pension Plan as to which a favorable determination
    letter has not yet been received.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;Neither the Company nor any Commonly Controlled
    Entity has (A)&nbsp;maintained, contributed to or been required
    to contribute to any Company Benefit Plan that is subject to
    Title&nbsp;IV of ERISA or (B)&nbsp;has any unsatisfied liability
    under Title&nbsp;IV of ERISA.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;All reports, returns and similar documents with
    respect to all Company Benefit Plans required to be filed with
    any Governmental Entity or distributed to any Company Benefit
    Plan participant have been duly and timely filed or distributed.
    None of the Company or any of its Subsidiaries has received
    written notice of, and to the Knowledge of the Company, there
    are no investigations by any Governmental Entity pending with
    respect to, termination proceedings or other claims (except
    claims for benefits payable in the normal operation of the
    Company Benefit Plans), suits or proceedings against or
    involving any Company Benefit Plan or asserting any rights or
    claims to benefits under any Company Benefit Plan that would
    give rise to any material liability (individually or in the
    aggregate).</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;All contributions, premiums and benefit payments under
    or in connection with the Company Benefit Plans that are
    required to have been made as of the date hereof in accordance
    with the terms of the Company Benefit Plans have been timely
    made or have been reflected on the most recent consolidated
    balance sheet filed or incorporated by reference into the Filed
    Company SEC Documents. Neither any Company Pension Plan nor any
    single-employer plan of any Commonly Controlled Entity has an
    &#147;accumulated funding deficiency&#148; (as such term is
    defined in Section&nbsp;302 of ERISA or Section&nbsp;412 of the
    Code), whether or not waived.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vi)&nbsp;With respect to each Company Benefit Plan,
    (A)&nbsp;there has not occurred any prohibited transaction
    (within the meaning of Section&nbsp;406 of ERISA or
    Section&nbsp;4975 of the Code) in which the Company or any of
    its Subsidiaries or any of their respective employees, or any
    trustee, administrator or other fiduciary of such Company
    Benefit Plan, or any agent of the foregoing, has engaged that
    would reasonably be expected to subject the Company or any of
    its Subsidiaries or any of their respective employees, or, to
    the Knowledge of the Company, a trustee, administrator or other
    fiduciary of any trust created under any Company Benefit Plan,
    to the tax or penalty on prohibited transactions imposed by
    Section&nbsp;4975 of the Code or the sanctions imposed under
    Title&nbsp;I of ERISA, except for any such transactions that,
    individually or in the aggregate, would not reasonably be
    expected to have a Material Adverse Effect and (B)&nbsp;neither
    the Company nor any of its Subsidiaries nor, to the Knowledge of
    the Company, any trustee, administrator or other fiduciary of
    any Company Benefit Plan nor any agent of any of the foregoing,
    has engaged in any transaction or acted in a manner, or failed
    to act in a manner, that could reasonably be expected to subject
    the Company or any of its Subsidiaries or, to the Knowledge of
    the Company, any trustee, administrator or other fiduciary, to
    any liability for breach of fiduciary duty under ERISA or any
    other applicable law, except for any such transactions that,
    individually or in the aggregate, would not reasonably be
    expected to have a Material Adverse Effect. No Company Benefit
    Plan or related trust has been terminated, nor has there been
    any &#147;reportable event&#148; (as that term is defined in
    Section&nbsp;4043 of ERISA) for which the 30-day reporting
    requirement has not been waived with respect to any Company
    Benefit Plan, during the last five years, and no notice of a
    reportable event will be required to be filed in connection with
    the transactions contemplated by this Agreement.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vii)&nbsp;Section&nbsp;3.01(p)(vii) of the Company Disclosure
    Schedule discloses whether each Company Benefit Plan that is an
    employee welfare benefit plan is (A)&nbsp;unfunded or
    self-insured, (B)&nbsp;funded through a &#147;welfare benefit
    fund&#148;, as such term is defined in Section&nbsp;419(e) of
    the Code, or other funding mechanism or (C)&nbsp;insured. Each
    such employee welfare benefit plan may be amended or terminated
    (including with respect to benefits provided to retirees and
    other former employees) without material liability (individually
    or in the aggregate) to the Company or any of its Subsidiaries
    at any time after the Effective Time. Each of the Company and
    its Subsidiaries complies with the applicable requirements of
    Section&nbsp;4980B(f) of the Code or any similar state statute
    with respect to each Company Benefit Plan that is a group health
    plan, as such term is defined in Section&nbsp;5000(b)(1) of the
    Code or such state statute, except for any instances of
    noncompliance that, individually or in the aggregate, would not
    be reasonably expected to have a Material Adverse Effect.
    Neither the Company nor any of its Subsidiaries has any material
    obligations (individually or in the aggregate) for retiree
    health or life insurance benefits under any Company Benefit Plan
    (other than for continuation coverage required under
    Section&nbsp;4980(f) of the Code).</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (viii)&nbsp;Except as set forth in Section&nbsp;3.01(p)(viii) of
    the Company Disclosure Schedule, none of the execution and
    delivery of this Agreement, the Shareholder Agreement, the
    obtaining of the Shareholder Approval or the consummation of the
    Merger or any other transaction expressly contemplated by this
    Agreement or the Shareholder Agreement (including as a result of
    any termination of employment on or following the Effective
    Time) will (A)&nbsp;entitle any current or former director,
    officer, employee or consultant of the Company or any of its
    Subsidiaries to severance or termination pay,
    (B)&nbsp;accelerate the time of payment or vesting, or trigger
    any payment or funding (through a grantor trust or otherwise)
    of, compensation or benefits under, increase the</TD>
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    amount payable or trigger any other material obligation
    (individually or in the aggregate) pursuant to, any Company
    Benefit Plan or Company Benefit Agreement or (C)&nbsp;result in
    any breach or violation of, or a default under, any Company
    Benefit Plan or Company Benefit Agreement. The Company has
    provided Parent with an estimate of the total amount of all
    payments and the fair market value of all non-cash benefits that
    may become payable or provided to any director, officer,
    employee or consultant of the Company or any of its Subsidiaries
    under the Company Benefit Agreements (assuming for such purpose
    that such individuals&#146; employment were terminated
    immediately following the Effective Time as if the Effective
    Time were the date hereof).</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ix)&nbsp;Neither the Company nor any of its Subsidiaries has
    any liability or obligations, including under or on account of a
    Company Benefit Plan, arising out of the hiring of persons to
    provide services to the Company or any of its Subsidiaries and
    treating such persons as consultants or independent contractors
    and not as employees of the Company or any of its Subsidiaries,
    except for any such liabilities or obligations that,
    individually or in the aggregate, would not reasonably be
    expected to have a Material Adverse Effect.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (x)&nbsp;No deduction by the Company or any of its Subsidiaries
    in respect of any &#147;applicable employee remuneration&#148;
    (within the meaning of Section&nbsp;162(m) of the Code) has been
    disallowed or is subject to disallowance by reason of
    Section&nbsp;162(m) of the Code.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (q)&nbsp;<I>No Excess Parachute Payments.</I> Other than
    payments or benefits that may be made to the persons listed in
    Section&nbsp;3.01(q) of the Company Disclosure Schedule
    (&#147;Primary Company Executives&#148;), no amount or other
    entitlement or economic benefit that could be received (whether
    in cash or property or the vesting of property) as a result of
    the execution and delivery of this Agreement, the Shareholder
    Agreement, the obtaining of the Shareholder Approval, the
    consummation of the Merger or any other transaction contemplated
    by this Agreement or the Shareholder Agreement (including as a
    result of termination of employment on or following the
    Effective Time) by or for the benefit of any director, officer,
    employee or consultant of the Company or any of its Affiliates
    who is a &#147;disqualified individual&#148; (as such term is
    defined in proposed Treasury
    Regulation&nbsp;Section&nbsp;1.280G-1) under any Company Benefit
    Plan, Company Benefit Agreement or otherwise would be set forth
    therein as an &#147;excess parachute payment&#148; (as such term
    is defined in Section&nbsp;280G(b)(1) of the Code), and no such
    disqualified individual is entitled to receive any additional
    payment from the Company or any of its Subsidiaries, the
    Surviving Corporation or any other person in the event that the
    excise tax required by Section&nbsp;4999(a) of the Code is
    imposed on such disqualified individual (a &#147;Parachute Gross
    Up Payment&#148;). The Company has provided Parent with a
    calculation, as Section&nbsp;3.01(q) of the Company Disclosure
    Schedule sets forth, calculated as of the date set forth therein
    of (i)&nbsp;the &#147;base amount&#148; (as such term is defined
    in Section&nbsp;280G(b)(3) of the Code) for (A)&nbsp;each
    Primary Company Executive and (B)&nbsp;each other disqualified
    individual (defined as set forth above) whose Company Stock
    Options will vest pursuant to their terms in connection with the
    execution and delivery of this Agreement, the Shareholder
    Agreement, the obtaining of the Shareholder Approval, the
    consummation of the Merger or any other transaction contemplated
    by this Agreement or the Shareholder Agreement (including as a
    result of any termination of employment on or following the
    Effective Time) and (ii)&nbsp;the estimated maximum amount,
    including any Parachute Gross Up Payment, that could be paid or
    provided to each Primary Company Executive as a result of the
    execution and delivery of this Agreement, the Shareholder
    Agreement, the obtaining of the Shareholder Approval, the
    consummation of the Merger or any other transaction contemplated
    by this Agreement or the Shareholder Agreement (including as a
    result of any termination of employment on or following the
    Effective Time), in each case subject to the assumptions stated
    therein.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (r)&nbsp;<I>Taxes.</I></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;Each of the Company, its Subsidiaries and each Company
    Consolidated Group has filed or has caused to be filed in a
    timely manner (within any applicable extension period) all
    material tax returns required to be filed with any taxing
    authority pursuant to the Code (and any applicable Treasury
    Regulations) or applicable state, local or foreign tax laws. All
    such tax returns are complete</TD>
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    and accurate in all material respects and have been prepared in
    substantial compliance with all applicable laws and regulations.
    Each of the Company, its Subsidiaries and each Company
    Consolidated Group has paid or caused to be paid (or the Company
    has paid on its behalf) all material taxes (individually or in
    the aggregate) due and owing, and, in accordance with GAAP, the
    most recent financial statements contained in the Filed Company
    SEC Documents reflect an adequate reserve (excluding any
    reserves for deferred taxes established to reflect timing
    differences between book and tax income) for all material taxes
    (individually or in the aggregate) payable by the Company and
    its Subsidiaries for all taxable periods and portions thereof
    accrued through the date of such financial statements.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;No tax return of the Company or any of its
    Subsidiaries or any Company Consolidated Group is under audit or
    examination by any taxing authority, and no written notice of
    such an audit or examination has been received by the Company or
    any of its Subsidiaries or any Company Consolidated Group.
    Except as set forth in Section&nbsp;3.01(r)(ii) of the Company
    Disclosure Schedule, there is no assessed deficiency, refund
    litigation, proposed adjustment or matter in controversy with
    respect to any material amount (individually or in the
    aggregate) of taxes due and owing by the Company or any of its
    Subsidiaries or any Company Consolidated Group. Except as set
    forth in Section&nbsp;3.01(r)(ii) of the Company Disclosure
    Schedule, each material assessed deficiency resulting from any
    completed audit or examination relating to taxes by any taxing
    authority has been timely paid (including payment of applicable
    penalties or interest). No issues relating to any material
    amount (individually or in the aggregate) of taxes were raised
    by the relevant taxing authority in any completed audit or
    examination that could reasonably be expected to recur in a
    later taxable period. Except as set forth in
    Section&nbsp;3.01(r)(ii) of the Company Disclosure Schedule,
    there is no currently effective agreement or other document
    extending, or having the effect of extending, the period of
    assessment or collection of any material taxes of the Company or
    its Subsidiaries or any Company Consolidated Group, nor has any
    request been made by the Company, any of its Subsidiaries or any
    Company Consolidated Group for any such extension, and no power
    of attorney (other than powers of attorney authorizing employees
    of the Company, any of its Subsidiaries or any Company
    Consolidated Group to act on behalf of the Company, any of its
    Subsidiaries or any Company Consolidated Group) with respect to
    any taxes has been executed or filed by the Company, any of its
    Subsidiaries or any Company Consolidated Group with any taxing
    authority.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;None of the Company or any of its Subsidiaries will
    be required to include in a taxable period ending after the
    Effective Time taxable income attributable to income that
    accrued (for purposes of the financial statements of the Company
    included in the Filed Company SEC Documents) in a prior taxable
    period (or portion of a taxable period) but was not recognized
    for tax purposes in any prior taxable period as a result of
    (A)&nbsp;an open transaction disposition made on or before the
    Effective Time, (B)&nbsp;a prepaid amount received on or prior
    to the Effective Time, (C)&nbsp;any method of accounting for tax
    purposes (including, without limitation, the installment method
    or the long-term contract method of accounting) or
    Section&nbsp;481 of the Code or (D)&nbsp;any comparable
    provisions of state or local tax law, domestic or foreign, or
    for any other reason.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;The Company and its Subsidiaries have complied with
    all applicable statutes, laws, ordinances, rules and regulations
    relating to the payment and withholding of any material amount
    (individually or in the aggregate) of taxes and have, within the
    time and the manner prescribed by law, withheld from and paid
    over to the proper governmental authorities all material amounts
    (individually or in the aggregate) required to be so withheld
    and paid over under applicable laws.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;None of the Company or any of its Subsidiaries has
    constituted either a &#147;distributing corporation&#148; or a
    &#147;controlled corporation&#148; in a distribution of stock
    qualifying or intended to qualify for tax-free treatment (in
    whole or in part) under Sections&nbsp;355 or 361(c) of the Code.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vi)&nbsp;Neither the Company nor any of its Subsidiaries
    (A)&nbsp;is or has been a member of an affiliated group (within
    the meaning of Section&nbsp;1504 of the Code) filing a
    consolidated federal income tax return other than an affiliated
    group the common parent of which is the Company, (B)&nbsp;is</TD>
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    or has been a member of any affiliated, combined, consolidated,
    unitary, or similar group for state, local or foreign tax
    purposes other than a group the common parent of which is the
    Company, (C)&nbsp;is or has been a party to any tax allocation,
    tax sharing, or tax indemnification agreement, or (D)&nbsp;has
    any material liability (individually or in the aggregate) for
    the taxes of any person (other than any of the Company and its
    Subsidiaries) under Treasury Regulations Section&nbsp;1.1502-6
    (or any similar provision of state, local, or foreign law), as a
    transferee or successor, by contract, or otherwise.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vii)&nbsp;No written claim has ever been made by any authority
    in a jurisdiction where any of the Company or its Subsidiaries
    does not file a tax return that it is, or may be, subject to a
    material amount (individually or in the aggregate) of tax by
    that jurisdiction.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (viii)&nbsp;Neither the Company nor any of its Subsidiaries is a
    party to or bound by any advance pricing agreement, closing
    agreement or other agreement relating to taxes with any taxing
    authority.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ix)&nbsp;No Liens for taxes exist with respect to any assets or
    properties of the Company or its Subsidiaries, except for
    statutory Liens for taxes not yet due and payable.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (x)&nbsp;The Company is not and has never been a &#147;United
    States real property holding corporation&#148; within the
    meaning of Section&nbsp;897(c)(2) of the Code.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xi)&nbsp;Except as set forth in Section&nbsp;3.01(r)(xi) of the
    Company Disclosure Schedule, there are no material
    &#147;deferred intercompany transactions&#148; or
    &#147;intercompany transactions&#148; between the Company and
    any of its Subsidiaries (or any of their respective
    predecessors), the gain or loss in which has not yet been taken
    into account under the consolidated return Treasury Regulations
    currently or previously in effect, as applicable.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xii)&nbsp;Neither the Company nor any of its Subsidiaries has
    participated in a listed transaction within the meaning of
    Treasury Regulations Section&nbsp;1.6011-4(b)(2) or any similar
    listed transaction under applicable state law.</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xiii)&nbsp;As used in this Agreement (A)&nbsp;&#147;tax&#148;
    or &#147;taxes&#148; shall include (whether disputed or not) all
    (x)&nbsp;Federal, state, local and foreign income, gross
    receipts, franchise, property, sales, use, excise, withholding,
    payroll, employment, social security, capital gain, alternative
    minimum, transfer, value added and other taxes and similar
    governmental charges, including any interest, penalties and
    additions with respect thereto, (y)&nbsp;liability for the
    payment of any amounts of the type described in
    clause&nbsp;(x)&nbsp;as a result of being a member of an
    affiliated, consolidated, combined, unitary or aggregate group
    and (z)&nbsp;liability for the payment of any amounts as a
    result of being party to any tax sharing agreement or as a
    result of any express or implied obligation to indemnify any
    other person with respect to the payment of any amounts of the
    type described in clause&nbsp;(x)&nbsp;or (y);
    (B)&nbsp;&#147;Company Consolidated Group&#148; means any
    affiliated group within the meaning of Section&nbsp;1504(a) of
    the Code, or any other similar state, local or foreign law, in
    which the Company (or any Subsidiary of the Company) is or has
    ever been a member or any group of corporations with which the
    Company files, has filed or is or was required to file an
    affiliated, consolidated, combined, unitary or aggregate tax
    return; (C)&nbsp;&#147;taxing authority&#148; means any Federal,
    state, local or foreign government, any subdivision, agency,
    commission or authority thereof, or any quasi-governmental body
    exercising tax regulatory authority; (D)&nbsp;&#147;tax
    return&#148; or &#147;tax returns&#148; means all returns,
    declarations of estimated tax payments, reports, estimates,
    information returns and statements, including any related or
    supporting information with respect to any of foregoing, filed
    or to be filed with any taxing authority in connection with the
    determination, assessment, collection or administration of any
    taxes; and (E)&nbsp;&#147;Treasury Regulations&#148; means the
    regulations promulgated under the Code in effect on the date
    hereof and the corresponding sections of any regulations
    subsequently issued that amend or supersede such regulations.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (s)&nbsp;<I>Title&nbsp;to Properties.</I></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;Except as set forth in Section&nbsp;3.01(s)(i) of the
    Company Disclosure Schedule, each of the Company and its
    Subsidiaries has good and marketable title to, or valid
    leasehold interests in, all its</TD>
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    properties and other assets except for such as are no longer
    used or useful in the conduct of its business or as have been
    disposed of in the ordinary course of business and except for
    defects in title, easements, restrictive covenants and similar
    encumbrances that individually or in the aggregate, would not
    reasonably be expected to have a Material Adverse Effect and
    that would not reasonably be expected to materially interfere
    with, its ability to conduct its business as presently
    conducted. Except as set forth in Section&nbsp;3.01(s)(i) of the
    Company Disclosure Schedule, all such properties and other
    assets, other than properties and other assets in which the
    Company or any of its Subsidiaries has a leasehold interest, are
    free and clear of all Liens, except for Liens that individually
    or in the aggregate have not materially interfered with, and
    could not reasonably be expected to materially interfere with,
    the ability of the Company or any of its Subsidiaries to conduct
    their respective businesses as presently conducted. Except as
    set forth in Section&nbsp;3.01(s)(i) of the Company Disclosure
    Schedule, the Company has good and marketable title to all
    memorabilia, other than photographs, on display in its corporate
    headquarters in Tempe, Arizona.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;Each of the Company and its Subsidiaries has complied
    with the terms of all material leases to which it is a party and
    under which it is in occupancy, except for any instances of
    noncompliance that, individually or in the aggregate, would not
    reasonably be expected to have a Material Adverse Effect, and,
    to the Knowledge of the Company, all such leases to which the
    Company is a party or under which it is in occupancy are in full
    force and effect. Each of the Company and its Subsidiaries
    enjoys in all material respects peaceful and undisturbed
    possession of the real property assets purported to be leased
    under its material leases.</TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (t)&nbsp;<I>Intellectual Property.</I></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;Subject to Section&nbsp;3.01(t)(i) of the Company
    Disclosure Schedule, each of the Company and its Subsidiaries
    owns, or is validly licensed or otherwise has the right to use
    all inventions, discoveries, innovations, improvements, patents,
    patent applications, trademarks, trademark rights, trade names,
    trade name rights, domain names, service marks, service mark
    rights, copyrights, software, source code, tooling,
    manufacturing methods, technical know-how and other proprietary
    intellectual property rights and computer programs
    (collectively, &#147;Intellectual Property Rights&#148;) which
    are material to the conduct of the business of the Company and
    its Subsidiaries, taken as a whole, in each case free and clear
    of all Liens. No Related Party owns or licenses any Intellectual
    Property Rights used by the Company in the conduct of its
    business.</TD>
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    <TD style="font-size: 6pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;Except as set forth in Section&nbsp;3.01(t)(ii) of the
    Company Disclosure Schedule, no suit, action or proceeding is
    pending or, to the Knowledge of the Company, threatened that the
    Company or any of its Subsidiaries is infringing (including with
    respect to the manufacture, use or sale by the Company or any of
    its Subsidiaries of their respective products) the rights of any
    person with regard to any Intellectual Property Right. To the
    Knowledge of the Company, no person or persons are infringing
    the rights of the Company or any of its Subsidiaries with
    respect to any Intellectual Property Right.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;Except as set forth in Section&nbsp;3.01(t)(iii) of
    the Company Disclosure Schedule, no suit, action or proceeding
    is pending or, to the Knowledge of the Company, threatened with
    regard to the ownership by the Company or any of its
    Subsidiaries of any of their respective Intellectual Property
    Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;Section&nbsp;3.01(t)(iv) of the Company Disclosure
    Schedule sets forth, as of the date hereof, a complete and
    accurate list of all material patents, registered trademarks and
    applications therefor, common law trademarks, domain name
    registrations and copyright registrations (if any) owned by or
    licensed to the Company or any of its Subsidiaries. All patents
    and patent applications listed in Section&nbsp;3.01(t)(iv) of
    the Company Disclosure Schedule are owned by or licensed to the
    Company or a Subsidiary of the Company free and clear of all
    Liens. The patent applications listed in
    Section&nbsp;3.01(t)(iv) of the Company Disclosure Schedule are
    pending and have not been abandoned, and have been and continue
    to be timely prosecuted. All material patents, registered
    trademarks and applications therefor owned by or licensed to the
    Company or any of its Subsidiaries have been duly</TD>
</TR>

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    <TD width="94%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
    registered and/or filed with or issued by each appropriate
    Governmental Entity in the jurisdiction indicated in
    Section&nbsp;3.01(t)(iv) of the Company Disclosure Schedule, all
    necessary affidavits of continuing use have been filed, and all
    necessary maintenance fees have been timely paid to continue all
    such rights in effect. There are no ongoing interferences,
    oppositions, reissues, reexaminations or other proceedings
    involving any of the patents or patent applications listed in
    Section&nbsp;3.01(t)(iv) of the Company Disclosure Schedule,
    including ex parte and post-grant proceedings, in the
    United&nbsp;States Patent and Trademark Office or in any foreign
    patent office or similar administrative agency, other than as
    would not reasonably be expected to have a Material Adverse
    Effect. Each of the patents and patent applications listed in
    Section&nbsp;3.01(t)(iv) of the Company Disclosure Schedule each
    and every inventor of the claims thereof as determined in
    accordance with the laws of the jurisdiction in which such
    patent is issued or such patent application is pending. Each
    inventor named on the patents and patent applications listed in
    Section&nbsp;3.01(t)(iv) of the Company Disclosure Schedule has
    executed an agreement assigning his, her or its entire right,
    title and interest in and to such patent or patent application,
    and the inventions embodied and claimed therein, to the Company
    or a Subsidiary of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;Section&nbsp;3.01(t)(v) of the Company Disclosure
    Schedule sets forth a complete and accurate list of all options,
    rights, licenses or interests of any kind relating to
    Intellectual Property Rights granted (i)&nbsp;to the Company or
    any of its Subsidiaries (other than software licenses for
    generally available software and except pursuant to employee
    proprietary inventions agreements (or similar employee
    agreements), non-disclosure agreements and consulting agreements
    entered into by the Company or any of its Subsidiaries in the
    ordinary course of business), or (ii)&nbsp;by the Company or any
    of its Subsidiaries to any other person, in each case that are
    material to the Company.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vi)&nbsp;The Company and its Subsidiaries have used reasonable
    efforts to maintain their material trade secrets in confidence,
    including entering into licenses and contracts that generally
    require licensees, contractors and other third persons with
    access to such trade secrets to keep such trade secrets
    confidential.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="97%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (u)&nbsp;<I>Voting Requirements.</I> The affirmative vote of
    holders of a majority of the outstanding shares of Company
    Common Stock at the Shareholders&#146; Meeting or any
    adjournment or postponement thereof to approve this Agreement
    (the &#147;Shareholder Approval&#148;) is the only vote of the
    holders of any class or series of capital stock of the Company
    necessary to adopt this Agreement and approve the transactions
    contemplated hereby.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;<I>State Takeover Statutes.</I> The Board of Directors
    of the Company or a committee of such Board of Directors has
    unanimously approved the terms of this Agreement and the
    Shareholder Agreement and the consummation of the Merger and the
    other transactions contemplated by this Agreement and the
    Shareholder Agreement, and such approval or approvals represent
    all the action necessary to render inapplicable to this
    Agreement, the Shareholder Agreement, the Merger and the other
    transactions contemplated by this Agreement and the Shareholder
    Agreement, the limitations on business combinations contained in
    Sections&nbsp;10-2741 through 10-2743 of the Arizona Code. No
    other state takeover statute or similar statute or regulation
    applies to this Agreement, the Shareholder Agreement, the Merger
    or the other transactions contemplated by this Agreement or the
    Shareholder Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (w)&nbsp;<I>Brokers and Other Advisors.</I> Except as set forth
    in Section&nbsp;3.01(w) of the Company Disclosure Schedule, no
    broker, investment banker, financial advisor or other person
    (other than SunTrust Robinson Humphrey, the fees and expenses of
    which will be paid by the Company), is entitled to any
    broker&#146;s, finder&#146;s, financial advisor&#146;s or other
    similar fee or commission in connection with the transactions
    contemplated by this Agreement based upon arrangements made by
    or on behalf of the Company. The Company has delivered to Parent
    complete and accurate copies of all agreements under which any
    such fees or expenses are payable and all indemnification and
    other agreements related to the engagement of the persons to
    whom such fees are payable.</TD>
</TR>

</TABLE>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (x)&nbsp;<I>Opinion of Financial Advisor.</I> The Company has
    received the opinion of SunTrust Robinson Humphrey, dated as of
    the date of the meeting of the Company&#146;s Board of Directors
    referred to in Section&nbsp;3.01(d) above, to the effect that,
    as of such date, the Merger Consideration is fair, from a
    financial point of view, to the holders of shares of Company
    Common Stock, a signed copy of which opinion has been delivered
    to Parent.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (y)&nbsp;<I>Insurance.</I> Section&nbsp;3.01(y) of the Company
    Disclosure Schedule contains a complete and accurate list of all
    policies of fire, liability, workers&#146; compensation, title
    and other forms of insurance owned, held by or applicable to the
    Company (or its assets or business), and the Company has
    heretofore delivered to Parent a complete and accurate copy of
    all such policies, including all occurrence-based policies
    applicable to the Company (or its assets or business) for all
    periods prior to the Closing Date. All such policies (or
    substitute policies with substantially similar terms and
    underwritten by insurance carriers with substantially similar or
    higher ratings) are in full force and effect, all premiums with
    respect thereto covering all periods up to and including the
    Closing Date have been paid, and no written notice of
    cancellation or termination has been received with respect to
    any such policy except for such policies, premiums,
    cancellations or terminations that individually or in the
    aggregate would not reasonably be expected to have a Material
    Adverse Effect.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;3.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Warranties of Parent Parties.</I> Except as set forth in the
disclosure schedule (with specific reference to the particular
Section or subsection of this Agreement to which the information
set forth in such disclosure schedule relates) delivered by the
Parent Parties to the Company prior to the execution of this
Agreement (the &#147;Parent Disclosure Schedule&#148;), each of
the Parent Parties severally (and not jointly) represents and
warrants (and as to the Guarantors, each in proportion to its
respective ownership of Parent) to the Company, as to such
Parent Party, as follows (for purposes of this
Section&nbsp;3.02, the Parent Parties shall mean Parent Sub and
each Guarantor):
</DIV>

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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Organization, Standing and Corporate Power.</I> Each
    Parent Party is a limited liability company or corporation duly
    organized, validly existing and in good standing under the laws
    of the jurisdiction in which it is organized and has all
    requisite limited liability company or corporate power and
    authority to carry on its business as now being conducted. Each
    Parent Party is duly qualified or licensed to do business and is
    in good standing in each material jurisdiction in which the
    nature of its business or the ownership, leasing or operation of
    its properties makes such qualification or licensing necessary,
    other than in such jurisdictions where the failure to be so
    qualified or licensed individually or in the aggregate would not
    reasonably be expected to have a material adverse effect on
    Parent or Sub.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>Authority; Noncontravention.</I> Each Parent Party
    has all requisite limited liability company or corporate power
    and authority to execute and deliver this Agreement and to
    consummate the transactions contemplated by this Agreement. The
    execution and delivery of this Agreement by each Parent Party
    and the consummation by each Parent Party of the transactions
    contemplated by this Agreement have been duly authorized by all
    necessary limited liability company or corporate action on the
    part of such Parent Party and no other limited liability company
    or corporate proceedings on the part of such Parent Party are
    necessary to authorize this Agreement or to consummate the
    transactions contemplated hereby. This Agreement and the
    transactions contemplated hereby do not require approval of the
    holders of any member interests of Parent. This Agreement has
    been duly executed and delivered by each Parent Party and,
    assuming the due authorization, execution and delivery by the
    Company, constitutes a legal, valid and binding obligation of
    such Parent Party, as applicable, enforceable against such
    Parent Party, as applicable, in accordance with its terms. The
    execution and delivery of this Agreement do not, and the
    consummation of the Merger and the other transactions
    contemplated by this Agreement and compliance with the
    provisions of this Agreement will not, conflict with, or result
    in any violation or breach of, or default (with or without
    notice or lapse of time, or both) under, or give rise to a right
    of, or result in, termination, cancellation or acceleration of
    any obligation or to the loss of a benefit under, or result in
    the creation of any Lien in or upon any of the properties or
    other assets of any Parent Party under (x)&nbsp;the Certificate
    of Formation or Limited Liability Company Agreement of Parent or
    the Certificate of Incorporation or Bylaws of Sub or any
    Guarantor, (y)&nbsp;any Contract to which any Parent Party is a
    party or any of their respective properties or other assets is
    subject, in any way that would prevent the</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">
    consummation by Parent or Sub of the Merger or (z)&nbsp;subject
    to the governmental filings and other matters referred to in the
    following sentence, any (A)&nbsp;statute, law, ordinance, rule
    or regulation or (B)&nbsp;order, writ, injunction, decree,
    judgment or stipulation, in each case applicable to such Parent
    Party or their respective properties or other assets, and in
    each case, in any way that would prevent the consummation by
    Parent or Sub of the Merger. No material consent, approval,
    order or authorization of, action by or in respect of, or
    registration, declaration or filing with, any Governmental
    Entity is required by or with respect to any Parent Party in
    connection with the execution and delivery of this Agreement by
    such Parent Party or the consummation by Parent and Sub of the
    Merger or the other transactions contemplated by this Agreement,
    except for (1)&nbsp;the filing of a premerger notification and
    report form by Parent or the Guarantors under the HSR Act and
    the receipt, termination or expiration, as applicable, of
    approvals or waiting periods required under the HSR Act or any
    other applicable competition, merger control, antitrust or
    similar law or regulation and (2)&nbsp;the filing of the
    Articles of Merger with the Corporation Commission of the State
    of Arizona.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;<I>Litigation.</I> There is no suit, action,
    investigation or proceeding pending or, to the knowledge of any
    Parent Party, threatened against or affecting a Parent Party or
    any of its Affiliates that would reasonably be expected to
    materially impair the ability of a Parent Party to perform its
    obligations hereunder or to consummate the transactions
    contemplated hereby on a timely basis. To the knowledge of any
    Parent Party, after consultation with its professional advisors,
    consummation of the transactions hereby will not violate any
    rule, law or regulation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;<I>Information Supplied.</I> None of the information
    supplied or to be supplied by or on behalf of any Parent Party
    specifically for inclusion or incorporation by reference in the
    Proxy Statement will, at the date it is first mailed to the
    shareholders of the Company and at the time of the
    Shareholders&#146; Meeting, contain any untrue statement of a
    material fact or omit to state any material fact required to be
    stated therein or necessary in order to make the statements
    therein, in light of the circumstances under which they are
    made, not misleading.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (e)&nbsp;<I>Interim Operations of Sub.</I> Sub was formed solely
    for the purpose of engaging in the transactions contemplated
    hereby, has engaged in no other business activities and has
    conducted its operations only as contemplated hereby.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (f)&nbsp;<I>Capital Resources.</I> Parent has sufficient cash,
    or commitments from the Guarantors, to pay the aggregate Merger
    Consideration.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;4
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Covenants Relating to Conduct of Business
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;4.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conduct
of Business.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;<I>Conduct of Business by the Company.</I> During the
period from the date of this Agreement to the Effective Time,
the Company shall, and shall cause each of its Subsidiaries to,
carry on its business in the ordinary course consistent with
past practice and in material compliance with all applicable
laws, rules, regulations and treaties and, to the extent
consistent therewith, use all commercially reasonable efforts to
preserve intact its current business organizations, keep
available the services of its current officers, employees and
consultants and preserve its relationships with customers,
suppliers, licensors, licensees, distributors and others, except
to the extent that the Company&#146;s failure to use such
commercially reasonable efforts would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect. In addition to and without limiting the generality of
the foregoing, during the period from the date of this Agreement
to the Effective Time, the Company shall not, and shall not
permit any of its Subsidiaries to, without Parent&#146;s prior
written consent, or except as set forth in Section&nbsp;4.01(a)
of the Company Disclosure Schedule:
</DIV>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;(x)&nbsp;declare, set aside or pay any dividends on, or
    make any other distributions (whether in cash, stock or
    property) in respect of, any of its capital stock, other than
    dividends or distributions by a direct or indirect wholly owned
    Subsidiary of the Company to its parent, (y)&nbsp;split, combine
    or reclassify any of its</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
    capital stock or issue or authorize the issuance of any other
    securities in respect of, in lieu of or in substitution for
    shares of its capital stock or (z)&nbsp;purchase, redeem or
    otherwise acquire any shares of its capital stock or any other
    securities thereof or any rights, warrants or options to acquire
    any such shares or other securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;except as provided in Section&nbsp;5.04, issue,
    deliver, sell, grant, amend the terms of, reprice, pledge or
    otherwise encumber or subject to any Lien any shares of its
    capital stock, any other voting securities or any securities
    convertible into, or any rights, warrants or options to acquire,
    any such shares, voting securities or convertible securities, or
    any &#147;phantom&#148; stock, &#147;phantom&#148; stock rights,
    stock appreciation rights or stock based performance units,
    including pursuant to Contracts as in effect on the date hereof
    (other than the issuance of shares of Company Common Stock upon
    the exercise of Company Stock Options or Warrants, in each case
    outstanding on the date hereof in accordance with their terms on
    the date hereof);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;amend the Company Charter or the Company Bylaws or
    other comparable charter or organizational documents of any of
    the Company&#146;s Subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iv)&nbsp;directly or indirectly acquire (x)&nbsp;by merging or
    consolidating with, or by purchasing assets of, or by any other
    manner, any person or division, business or equity interest of
    any person or (y)&nbsp;any asset or assets that are material to
    the Company and its Subsidiaries, taken as a whole, except
    purchases of components, raw materials or supplies in the
    ordinary course of business consistent with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (v)&nbsp;(x)&nbsp;sell, lease, license, mortgage, sell and
    leaseback or otherwise encumber or subject to any Lien or
    otherwise dispose of any of its material properties or other
    assets or any interests therein (including securitizations),
    except for sales of inventory and used equipment in the ordinary
    course of business consistent with past practice or pursuant to
    contracts or agreements in effect as of the date hereof; or
    (y)&nbsp;enter into, modify, renew, extend or amend any lease of
    material property, except for modifications or amendments that
    are not adverse to the Company and its Subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vi)&nbsp;(x)&nbsp;incur any indebtedness for borrowed money or
    guarantee any such indebtedness of another person (including any
    Related Party) (other than any such indebtedness or guarantees
    under existing facilities or among the Company and its direct or
    indirect wholly owned Subsidiaries or among the direct and
    indirect wholly owned Subsidiaries), issue or sell any debt
    securities or calls, options, warrants or other rights to
    acquire any debt securities of the Company or any of its
    Subsidiaries, guarantee any debt securities of another person,
    enter into any &#147;keep well&#148; or other agreement to
    maintain any financial statement condition of another person or
    enter into any arrangement having the economic effect of any of
    the foregoing or (y)&nbsp;make any loans, advances or capital
    contributions to, or investments in, any other person (including
    any Related Party), other than to or in the Company or any
    direct or indirect wholly owned Subsidiary of the Company or to
    employees in respect of travel expenses in the ordinary course
    of business consistent with past practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (vii)&nbsp;make any new capital expenditure or expenditures
    which, individually, is in excess of $100,000 or, in the
    aggregate, are in excess of $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (viii)&nbsp;(v)&nbsp;pay, discharge, settle or satisfy any
    claims, liabilities, obligations or litigation (absolute,
    accrued, asserted or unasserted, contingent or otherwise), other
    than the payment, discharge, settlement or satisfaction in the
    ordinary course of business consistent with past practice or in
    accordance with their terms, of liabilities disclosed, reflected
    or reserved against in the most recent audited financial
    statements (or the notes thereto) of the Company included in the
    Filed Company SEC Documents (for amounts not in excess of such
    reserves) or incurred since the date of such financial
    statements in the ordinary course of business consistent with
    past practice, (w)&nbsp;cancel any material note or account
    receivable or discount in any material respect any material
    account receivable, (x)&nbsp;waive or assign any claims or
    rights of substantial value, (y)&nbsp;waive any benefits of, or
    agree to modify in any respect, or, subject to the terms hereof,
    fail to enforce, or consent to any matter with respect to which
    consent is required under, any standstill or similar agreement
    to which the Company or any of its Subsidiaries is a party or
    (z)&nbsp;waive any material benefits of, or agree to modify in
    any material respect, or, subject to the terms hereof, fail to</TD>
</TR>

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    <TD width="97%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
    enforce in any material respect, or consent to any matter with
    respect to which consent is required under, any material
    confidentiality or similar agreement to which the Company or any
    of its Subsidiaries is a party;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ix)&nbsp;enter into any Contracts (including any license
    agreements, but excluding confidentiality agreements containing
    customary terms which do not impose any obligations on the
    Company or its Subsidiaries other than those relating to the
    treatment of confidential information) relating to the license,
    marketing, co-promotion, manufacturing, research, development,
    distribution, training, sale or supply by third parties of
    products of the Company or any Subsidiary of the Company or
    products licensed by the Company or any Subsidiary of the
    Company which, individually, has aggregate future payment or
    other obligations with a value in excess of $100,000, or, in the
    aggregate, have future payment or other obligations with a value
    in excess of $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (x)&nbsp;except to the extent permitted under Section&nbsp;4.02,
    enter into, modify, amend or terminate any Contract or waive,
    release or assign any material rights or claims thereunder,
    which if so entered into, modified, amended, terminated, waived,
    released or assigned would reasonably be expected to
    (A)&nbsp;have a Material Adverse Effect, (B)&nbsp;impair in any
    material respect the ability of the Company to perform its
    obligations under this Agreement or (C)&nbsp;prevent or
    materially delay the consummation of the transactions
    contemplated by this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xi)&nbsp;enter into any Contract with a value, individually or
    together with all Contracts entered into pursuant to this
    Section&nbsp;4.01(a)(xi) and together with all Contracts entered
    into pursuant to Section&nbsp;4.01(a)(xii) hereof, in the
    aggregate, in excess of $100,000 to the extent consummation of
    the transactions contemplated by this Agreement or compliance by
    the Company with the provisions of this Agreement would
    reasonably be expected to conflict with, or result in a
    violation or breach of, or default (with or without notice or
    lapse of time, or both) under, or give rise to a right of, or
    result in, termination, cancellation or acceleration of any
    obligation or to the loss of a benefit under, or result in the
    creation of any Lien in or upon any of the properties or other
    assets of the Company or any of its Subsidiaries under, or give
    rise to any increased, additional, accelerated, or guaranteed
    right or entitlements of any third party under, or result in any
    material alteration of, any provision of such Contract;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xii)&nbsp;enter into any Contract with a value, individually or
    together with all Contracts entered into pursuant to this
    Section&nbsp;4.01(a)(xii) and together with all Contracts
    entered into pursuant to Section&nbsp;4.01(a)(xi) hereof, in the
    aggregate, in excess of $100,000 containing any restriction on
    the ability of the Company or any of its Subsidiaries to assign
    its rights, interests or obligations thereunder, unless such
    restriction expressly excludes any assignment to Parent or any
    of its Subsidiaries in connection with or following the
    consummation of the Merger and the other transactions
    contemplated by this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xiii)&nbsp;sell, transfer or license to any person or otherwise
    extend, amend or modify any material rights to the Intellectual
    Property Rights of the Company or any of its Subsidiaries other
    than in the ordinary course of business consistent with past
    practice;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xiv)&nbsp;except as otherwise contemplated by this Agreement or
    as required to comply with applicable law or the terms of any
    plan or agreement in effect on the date hereof,</TD>
</TR>

</TABLE>

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    <TD width="6%"></TD>
    <TD width="94%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (A)&nbsp;adopt, enter into, terminate or amend (I)&nbsp;any
    collective bargaining agreement or Company Benefit Plan or
    (II)&nbsp;any Company Benefit Agreement or other material
    agreement, plan or policy involving the Company or any of its
    Subsidiaries and one or more of their respective current or
    former directors, officers, employees or consultants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (B)&nbsp;increase in any manner the compensation, bonus or
    fringe or other benefits of, or pay any bonus of any kind or
    amount whatsoever to, any current or former director, officer,
    employee or consultant, other than normal increases in
    compensation to non-executive employees consistent with past
    practice;</TD>
</TR>

</TABLE>

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    <TD width="6%"></TD>
    <TD width="94%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (C)&nbsp;pay any benefit or amount not required under any
    Company Benefit Plan or Company Benefit Agreement or any other
    benefit plan or arrangement of the Company or any of its
    Subsidiaries as in effect on the date of this Agreement other
    than the payment of compensation and severance in the ordinary
    course of business consistent with past practice;</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (D)&nbsp;increase in any manner the severance or termination pay
    of any current or former director, officer, employee or
    consultant of the Company or any of its Subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (E)&nbsp;(i)&nbsp;grant or amend any awards of Company Stock
    Options, &#147;phantom&#148; stock, stock appreciation rights,
    &#147;phantom&#148; stock rights, stock based or stock related
    awards, performance units or restricted stock (including the
    grant or repricing of Company Stock Options, &#147;phantom&#148;
    stock, stock appreciation rights, &#147;phantom&#148; stock
    rights, stock based or stock related awards, performance units
    or restricted stock, or the removal of existing restrictions in
    any Company Benefit Agreements, Company Benefit Plans or
    agreements or awards made thereunder), or (ii)&nbsp;amend the
    terms of any bonus, incentive, performance or other compensation
    plan or arrangement, Company Benefit Agreement or Company
    Benefit Plan, other than in the ordinary course of business
    consistent with past practice;</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (F)&nbsp;amend or modify any Company Stock Option or Warrant;</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (G)&nbsp;take any action to fund or in any other way secure the
    payment of compensation or benefits under any employee plan,
    agreement, contract or arrangement or Company Benefit Plan or
    Company Benefit Agreement;</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (H)&nbsp;take any action to reprice or accelerate the vesting or
    payment of any compensation or benefit under any Company Benefit
    Plan or Company Benefit Agreement;&nbsp;or</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (I)&nbsp;materially change any actuarial or other assumption
    used to calculate funding obligations with respect to any
    Company Pension Plan or change the manner in which contributions
    to any Company Pension Plan are made or the basis on which such
    contributions are determined;</TD>
</TR>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xv)&nbsp;revalue any material assets of the Company or any of
    its Subsidiaries or make any change in accounting methods,
    principles or practices, other than any such changes required to
    comply with GAAP or applicable law; provided, that the Company
    shall notify and consult with Parent with respect to any such
    revaluation or change prior to its implementation;</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xvi)&nbsp;enter into or modify any Related Party
    Transaction;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (xvii)&nbsp;authorize any of, or commit, resolve, propose or
    agree to take any of, the foregoing actions.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;<I>Other Actions.</I> The Company, Parent and Sub shall
not, and shall not permit any of their respective Subsidiaries
to, take any action that would, or that would reasonably be
expected to, result in any of the conditions to the Merger set
forth in Article&nbsp;6 not being satisfied, except any action
permitted by Section&nbsp;4.02 or Section&nbsp;7.01.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;<I>Advice of Changes; Filings.</I> The Company and
Parent shall promptly advise the other party orally and in
writing of (i)&nbsp;any representation or warranty made by it
(and, in the case of Parent, made by Sub) contained in this
Agreement that is qualified as to materiality becoming untrue or
inaccurate in any respect or any such representation or warranty
that is not so qualified becoming untrue or inaccurate in any
material respect or (ii)&nbsp;the failure of it (and, in the
case of Parent, of Sub) to comply with or satisfy in any
material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided,
however, that no such notification shall affect the
representations, warranties, covenants or agreements of the
parties (or remedies with respect thereto) or the conditions to
the obligations of the parties under this Agreement. The Company
and Parent shall promptly provide the other copies of all
filings made by such party with any Governmental Entity in
connection with this Agreement and the transactions contemplated
hereby, other than the portions of such filings that include
confidential information not directly related to the
transactions contemplated by this Agreement.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;<I>Certain Tax Matters.</I> During the period from the
date of this Agreement to the Effective Time, the Company shall,
and shall cause each of its Subsidiaries to, (i)&nbsp;timely
file (without extensions) all tax returns (&#147;Post-Signing
Returns&#148;) required to be filed by or on behalf of each such
entity; (ii)&nbsp;timely pay all taxes due and payable in
respect of such Post-Signing Returns that are so filed;
(iii)&nbsp;accrue a reserve in the books and records and
financial statements of any such entity in accordance with past
practice for all taxes payable by such entity for which no
Post-Signing Return is due prior to the Effective Time;
(iv)&nbsp;promptly notify Parent of any suit, claim, action,
investigation, proceeding or audit (collectively,
&#147;Actions&#148;) pending against or with respect to the
Company or any of its Subsidiaries in respect of any material
amount (individually or in the aggregate) of tax and not settle
or compromise any such Action without Parent&#146;s consent;
provided, that Parent&#146;s consent shall not be unreasonably
withheld; provided, further, that Parent must respond to the
Company within ten business days following the receipt by Parent
of written notice of any proposed settlement or compromise of
any Action by the Company; (v)&nbsp;not make (other than in the
ordinary course of business consistent with past practice),
amend or revoke any material tax election or settle or
compromise any material tax liability, other than as required by
applicable law or with Parent&#146;s consent; (vi)&nbsp;not
execute any waiver of restrictions on assessment or collection
of any tax, other than with Parent&#146;s consent; and
(vii)&nbsp;cause all existing tax sharing agreements, tax
indemnity obligations and similar agreements, arrangements or
practices with respect to taxes to which the Company or any of
its Subsidiaries is or may be a party or by which the Company or
any of its Subsidiaries is or may otherwise be bound to be
terminated as of the Closing Date so that after such date
neither the Company nor any of its Subsidiaries shall have any
further rights or liabilities thereunder. Any tax returns
described in this Section&nbsp;4.01(d) shall be complete and
correct in all material respects and shall be prepared on a
basis consistent with past practice. The Company shall promptly
provide Parent with copies of any Post-Signing Returns, as
Parent may reasonably request.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;4.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Solicitation.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;Subject to Section&nbsp;4.02(b), from the date hereof
until the earlier of the Effective Time or the termination of
this Agreement pursuant to Article&nbsp;7, the Company shall
not, nor shall it authorize or permit any of its Subsidiaries or
any of their respective directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or
other advisor, agent or representative (collectively,
&#147;Representatives&#148;) retained by it or any of its
Subsidiaries to, directly or indirectly through another person,
(i)&nbsp;solicit, initiate or encourage, or knowingly take any
other action designed to, or which could reasonably be expected
to, facilitate, any inquiries or the making of any proposal that
constitutes, or could reasonably be expected to lead to, a
Takeover Proposal or (ii)&nbsp;enter into, continue or otherwise
participate in any discussions or negotiations regarding, or
furnish to any person any information or knowingly cooperate
with respect to, any Takeover Proposal. Without limiting the
foregoing, it is agreed that any violation of the restrictions
set forth in the preceding sentence by any Representative of the
Company or any of its Subsidiaries, whether or not such person
is purporting to act on behalf of the Company or any of its
Subsidiaries or otherwise, shall be a breach of this
Section&nbsp;4.02(a) by the Company. The Company shall, and
shall cause its Subsidiaries to, immediately cease and cause to
be terminated all existing discussions or negotiations with any
person conducted heretofore with respect to any Takeover
Proposal and request the prompt return or destruction of all
confidential information previously furnished.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;Notwithstanding the foregoing, at any time prior to
obtaining the Shareholder Approval, in response to a bona fide
written Takeover Proposal that the Board of Directors of the
Company determines in good faith (after consultation with
outside counsel and a financial advisor of nationally recognized
reputation) constitutes or is reasonably likely to lead to a
Superior Proposal, and which Takeover Proposal was unsolicited
and made after the date hereof and did not otherwise result from
a breach of Section&nbsp;4.02(a), the Company may, if its Board
of Directors determines in good faith (after consultation with
outside counsel) that it is required to do so in order to comply
with its fiduciary duties to the shareholders of the Company
under applicable law, and subject to compliance with
Section&nbsp;4.02(d) and after giving Parent written notice of
such determination, (x)&nbsp;furnish information with respect to
the Company and its Subsidiaries to the person making such
Takeover Proposal (and its Representatives) pursuant to a
customary confidentiality agreement not less restrictive of such
person than the Confidentiality Agreement, the terms of which do
not hinder or prohibit the Company from fulfilling its duties to
Parent under this Section&nbsp;4.02, provided that all such
non-public
</DIV>

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<DIV align="left" style="font-size: 10pt;">
information has previously been provided to Parent or is
provided to Parent prior to or substantially concurrently with
the time it is provided to such person, and (y)&nbsp;participate
in discussions or negotiations with the person making such
Takeover Proposal (and its Representatives) regarding such
Takeover Proposal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The term &#147;Takeover Proposal&#148; means any inquiry,
proposal or offer from any person (other than Parent) relating
to, or that could reasonably be expected to lead to, any direct
or indirect acquisition or purchase, in one transaction or a
series of transactions, of assets or businesses that constitute
15% or more of the revenues, net income or the fair market value
of the assets of the Company and its Subsidiaries, taken as a
whole, or 15% or more of any class of equity securities of the
Company or any of its Subsidiaries, any tender offer or exchange
offer that if consummated would result in any person
beneficially owning 15% or more of any class of equity
securities of the Company or any of its Subsidiaries, or any
merger, consolidation, business combination, recapitalization,
liquidation, dissolution, joint venture, binding share exchange
or similar transaction involving the Company or any of its
Subsidiaries pursuant to which any person or the shareholders of
any person would own 15% or more of any class of equity
securities of the Company or any of its Subsidiaries or of any
resulting parent company of the Company, other than the
transactions contemplated by this Agreement and the Shareholder
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The term &#147;Superior Proposal&#148; means any bona fide offer
made by a third party that if consummated would result in such
person (or its shareholders) owning, directly or indirectly, all
or substantially all of the shares of Company Common Stock then
outstanding (or of the surviving entity in a merger or the
direct or indirect parent of the surviving entity in a merger)
or all or substantially all the assets of the Company, which the
Board of Directors of the Company determines in good faith
(after consultation with a financial advisor of nationally
recognized reputation) to be (i)&nbsp;more favorable to the
shareholders of the Company from a financial point of view than
the Merger (taking into account all the terms and conditions of
such proposal and this Agreement (including any changes to the
financial terms of this Agreement proposed by Parent in response
to such offer or otherwise as of the date of such
determination)) and (ii)&nbsp;reasonably capable of being
completed, taking into account all financial, legal, regulatory
and other aspects of such proposal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;Subject to Section&nbsp;7.01(f), neither the Board of
Directors of the Company nor any committee thereof shall
(i)&nbsp;(A)&nbsp;withdraw (or modify in a manner adverse to
Parent), or propose to withdraw (or modify in a manner adverse
to Parent), the approval, recommendation or adoption by such
Board of Directors or any such committee thereof of this
Agreement, the Merger or the other transactions contemplated by
this Agreement or (B)&nbsp;recommend, adopt or approve, or
propose to recommend, adopt or approve, any Takeover Proposal
(any action described in this clause&nbsp;(i) being referred to
as a &#147;Company Adverse Recommendation Change&#148;) or
(ii)&nbsp;approve or recommend, or propose to approve or
recommend, or allow the Company or any of its Subsidiaries to
execute or enter into, any letter of intent, memorandum of
understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture
agreement, partnership agreement or other similar agreement
constituting or related to, or that is intended to or could
reasonably be expected to lead to, any Takeover Proposal (other
than a confidentiality agreement referred to in
Section&nbsp;4.02(b)) (an &#147;Acquisition Agreement&#148;).
Notwithstanding the foregoing, at any time prior to obtaining
the Shareholder Approval, the Board of Directors of the Company
may, in response to a Superior Proposal that was unsolicited and
made after the date hereof and that did not otherwise result
from a breach of this Section&nbsp;4.02, make a Company Adverse
Recommendation Change if such Board of Directors determines in
good faith (after consultation with outside counsel) that it is
required to do so in order to comply with its fiduciary duties
to the shareholders of the Company under applicable law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;In addition to the obligations of the Company set forth
in paragraphs&nbsp;(a)&nbsp;and (c)&nbsp;of this
Section&nbsp;4.02, the Company shall promptly (and in any event
within two business days after receipt thereof) advise Parent
orally and in writing of any Takeover Proposal or any inquiry
with respect to or that could reasonably be expected to lead to
any Takeover Proposal, the material terms and conditions of any
such Takeover Proposal or inquiry (including any changes
thereto) and the identity of the person making any such Takeover
Proposal or inquiry. The Company shall (i)&nbsp;keep Parent
fully informed of the status and details (including any change
to the terms thereof) of any such Takeover Proposal or inquiry,
and (ii)&nbsp;provide to Parent as soon as practicable after
receipt or delivery thereof copies of all relevant portions of
correspondence
</DIV>

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<DIV align="left" style="font-size: 10pt;">
and other written material sent or provided to the Company or
any of its Subsidiaries from any person that describes any of
the terms or conditions of any Takeover Proposal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;Nothing contained in this Section&nbsp;4.02 shall
prohibit the Company from (x)&nbsp;taking and disclosing to its
shareholders a position contemplated by Rule&nbsp;14e-2(a)
promulgated under the Exchange Act or (y)&nbsp;making any
required disclosure to the shareholders of the Company if, in
the good faith judgment of the Board of Directors of the Company
(after consultation with outside counsel) failure to so disclose
would constitute a violation of applicable law.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;5
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Additional Agreements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Preparation
of the Proxy Statement; Shareholders&#146; Meeting.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;As promptly as practicable following the date of this
Agreement, the Company and Parent shall prepare, and the Company
shall file with the SEC, the Proxy Statement. Each of Parent and
the Company shall use its commercially reasonable efforts to
respond as promptly as practicable to any comments from the SEC
or the staff of the SEC with respect to the Proxy Statement, and
the Company shall use its commercially reasonable efforts to
cause the Proxy Statement to be mailed to the shareholders of
the Company as promptly as practicable following the date of
this Agreement. The Company shall promptly notify Parent upon
the receipt of any comments from the SEC or the staff of the SEC
or any request from the SEC or the staff of the SEC for
amendments or supplements to the Proxy Statement or for
additional information, and shall provide Parent with copies of
all correspondence between it or any of its Representatives, on
the one hand, and the SEC or the staff of the SEC, on the other
hand. Notwithstanding the foregoing, prior to filing or mailing
the Proxy Statement (or any amendment or supplement thereto) or
responding to any comments from the SEC or the staff of the SEC
with respect thereto, the Company shall (i)&nbsp;provide Parent
an opportunity to review and comment on such document or
response and (ii)&nbsp;include in such document or response all
comments proposed by Parent and reasonably acceptable to the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;The Company shall, as soon as practicable following the
date of this Agreement, establish a record date for, duly call,
give notice of, convene and hold a meeting of its shareholders
(the &#147;Shareholders&#146; Meeting&#148;) solely for the
purpose of obtaining the Shareholder Approval. Subject to
Section&nbsp;4.02(c), the Company shall, through its Board of
Directors, recommend to its shareholders approval of this
Agreement and shall include such recommendation in the Proxy
Statement. Without limiting the generality of the foregoing, the
Company&#146;s obligations pursuant to the first sentence of
this Section&nbsp;5.01(b) shall not be affected by (i)&nbsp;the
commencement, public proposal, public disclosure or
communication to the Company of any Takeover Proposal or
(ii)&nbsp;the withdrawal or modification by the Board of
Directors of the Company or any committee thereof of such Board
of Directors&#146; or such committee&#146;s approval or
recommendation of this Agreement, the Merger or the other
transactions contemplated by this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Access
to Information; Confidentiality.</I> Subject to compliance with
applicable law, the Company shall afford to Parent, and to
Parent&#146;s officers, employees, accountants, counsel,
financial advisors and other Representatives, reasonable access
(including for the purpose of coordinating integration
activities and transition planning with the employees of the
Company and its Subsidiaries) during normal business hours
during the period prior to the Effective Time or the termination
of this Agreement to all its and its Subsidiaries&#146;
properties, books, contracts, commitments, personnel and records
and, during such period, the Company shall furnish promptly to
Parent (a)&nbsp;a copy of each report, schedule, registration
statement and other document filed by it during such period
pursuant to the requirements of Federal or state securities laws
and (b)&nbsp;all other information concerning its and its
Subsidiaries&#146; business, properties and personnel as Parent
may reasonably request and receive consistent with applicable
law and agreements. Without limiting the generality of the
foregoing, the Company will afford to Parent and its
Representatives access to, and facilitate and participate in
discussions with, all drivers, team owners, sanctioning bodies,
automobile manufacturers and other licensors for purposes of
discussing such parties&#146; license agreements and other
Contracts with the Company and its Subsidiaries; provided, that
all such discussions shall be arranged by the Company and shall
</DIV>

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<DIV align="left" style="font-size: 10pt;">
be undertaken jointly by the Parent and the Company unless the
Parent and the Company otherwise agree. Except for disclosures
expressly permitted by the terms of the Confidentiality
Agreement dated as of June&nbsp;17, 2005 between Parent and the
Company (as it may be amended from time to time, the
&#147;Confidentiality Agreement&#148;), Parent shall hold, and
shall cause its officers, employees, accountants, counsel,
financial advisors and other Representatives to hold, all
information received from the Company, directly or indirectly,
in confidence in accordance with the Confidentiality Agreement.
No investigation pursuant to this Section&nbsp;5.02 or
information provided or received by any party hereto pursuant to
this Agreement will affect any of the representations or
warranties of the parties hereto contained in this Agreement or
the conditions hereunder to the obligations of the parties
hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Commercially
Reasonable Efforts.</I> Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties
agrees to use its commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by this Agreement
and the Shareholder Agreement, including using commercially
reasonable efforts to accomplish the following: (i)&nbsp;the
taking of all acts necessary to cause the conditions to Closing
to be satisfied as promptly as practicable, (ii)&nbsp;the
obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities and the making
of all necessary registrations and filings (including filings
with Governmental Entities) and the taking of all steps as may
be necessary to obtain an approval or waiver from, or to avoid
an action or proceeding by, any Governmental Entity and
(iii)&nbsp;the obtaining of all necessary consents, approvals or
waivers from third parties. In connection with and without
limiting the foregoing, the Company and Parent shall duly file
with the U.S.&nbsp;Federal Trade Commission and the Antitrust
Division of the Department of Justice the notification and
report forms (the &#147;HSR Filing&#148;) required under the HSR
Act with respect to the transactions contemplated by this
Agreement as promptly as practicable. Each party shall cooperate
with the other party to the extent necessary to assist the other
party in the preparation of its HSR Filing and, if requested, to
promptly amend or furnish additional information thereunder and
shall use their commercially reasonable efforts to (A)&nbsp;take
such actions as are necessary or advisable to obtain prompt
approval of the consummation of the Transactions by any
Governmental Entity; and (B)&nbsp;to resolve any objections and
challenges, including by contest through litigation on the
merits (such litigation to be directed by Parent, with any
litigation costs incurred by the Company in connection with its
participation therein in excess of $100,000 to be borne by
Parent), negotiation or other action, that may be asserted by
any Governmental Entity or third party with respect to the
transaction contemplated by this Agreement under the HSR Act or
any other antitrust or unfair competition law, rule or
regulation; provided, however, that Parent shall not be required
to initiate or continue such contest through litigation and
shall be entitled to terminate this Agreement pursuant to
Section&nbsp;7.01(g) if (x)&nbsp;Parent shall determine that the
litigation cost to Parent and its Affiliates (including any
litigation costs of the Company that Parent would bear pursuant
to this Section&nbsp;5.03) are reasonably likely to exceed
$1,000,000, or (y)&nbsp;Parent shall determine in good faith
(after consultation with outside counsel) that Parent, the
Company or one of their Affiliates will be required to proffer,
divest or hold separate any material assets or any material
portion of any business of Parent, the Company or any of their
Affiliates in connection with resolving any such objection or
challenge; and provided, further, that no settlement in respect
of any such litigation which will in any way affect the
consideration to be received by the holders of the Company
Common Stock, Company Stock Options or Warrants hereunder shall
be approved by Parent without the Company&#146;s prior consent.
The Company and its Board of Directors shall (1)&nbsp;take all
action necessary to ensure that no state takeover statute or
similar statute or regulation is or becomes applicable to this
Agreement, the Shareholder Agreement, the Merger or any of the
other transactions contemplated by this Agreement or the
Shareholder Agreement and (2)&nbsp;if any state takeover statute
or similar statute becomes applicable to this Agreement, the
Shareholder Agreement, the Merger or any of the other
transactions contemplated by this Agreement or the Shareholder
Agreement, take all action necessary to ensure that the Merger
and the other transactions contemplated by this Agreement and
the Shareholder Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and the
Shareholder Agreement and otherwise to minimize the effect of
such statute or regulation on this Agreement, the
</DIV>

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<DIV align="left" style="font-size: 10pt;">
Shareholder Agreement, the Merger and the other transactions
contemplated by this Agreement and the Shareholder Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section&nbsp;5.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><I>Company
Stock Options; Warrants.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;As soon as practicable following the date of this
Agreement, the Board of Directors of the Company (or, if
appropriate, any committee thereof administering the Company
Stock Plans) shall adopt such resolutions or take such other
actions as may be required to effect the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;adjust the terms of all outstanding Company Stock
    Options, whether vested or unvested, as necessary to provide
    that, at the Effective Time, each Company Stock Option
    outstanding immediately prior to the Effective Time shall be
    cancelled and the holder thereof shall then become entitled to
    receive, as soon as practicable following the Effective Time, a
    single lump sum cash payment equal to (A)&nbsp;the product of
    (1)&nbsp;the number of shares of Company Common Stock for which
    such Company Stock Option shall not theretofore have been
    exercised and (2)&nbsp;the Merger Consideration, minus
    (B)&nbsp;the product of (1)&nbsp;the number of shares of Company
    Common Stock for which such Company Stock Option shall not
    theretofore have been exercised and (2)&nbsp;the per share
    exercise price of such Company Stock Option (provided that if
    such calculation results in a negative number, the lump sum cash
    payment shall be deemed to be $0);&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;make such other changes to the Company Stock Plans as
    the Company and Parent may agree in writing are appropriate to
    give effect to the Merger.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;As soon as practicable following the date of this
Agreement, the Board of Directors of the Company shall adopt
such resolutions or take such other actions (if any) as may be
required to provide that each Warrant outstanding immediately
prior to the Effective Time shall be cancelled in exchange for a
lump sum cash payment equal to (i)&nbsp;the product of
(A)&nbsp;the number of shares of Company Common Stock subject to
such Warrant and (B)&nbsp;the Merger Consideration, minus
(ii)&nbsp;the product of (A)&nbsp;the number of shares of
Company Common Stock subject to such Warrant and (B)&nbsp;the
per share exercise price of such Warrant (provided that if such
calculation results in a negative number, the lump sum cash
payment shall be deemed to be $0). As of the Closing, the
Company will have obtained all consents of the holders of the
Warrants necessary to effectuate the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;All amounts payable to holders of the Company Stock
Options or Warrants pursuant to Section&nbsp;5.04(a) and
(b)&nbsp;shall be subject to any required withholding of Taxes
and shall be paid without interest as soon as practicable
following the Effective Time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;The Company shall ensure that following the Effective
Time, no holder of a Company Stock Option (or former holder of a
Company Stock Option), nor any participant in any Company Stock
Plan, Company Benefit Plan or Company Benefit Agreement, shall
have any right thereunder to acquire any capital stock of the
Company or the Surviving Corporation or any other equity
interest therein (including &#147;phantom&#148; stock or stock
appreciation rights). In addition, the Company shall, subject to
receiving applicable consents and contingent upon the Closing,
amend the 1999 Employee Stock Purchase Plan (&#147;ESPP&#148;)
to (i)&nbsp;provide that as of the date of this Agreement, no
participant in the ESPP may increase his or her payroll
deductions or contributions to such plan, and
(ii)&nbsp;terminate the ESPP and provide that the &#147;Offering
Termination Date&#148; (as such term is defined in
Section&nbsp;4.1 of the ESPP) for the offering beginning
August&nbsp;1, 2005, shall be the date prior to the Closing Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification,
Exculpation and Insurance.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;Parent shall, to the fullest extent permitted by law,
cause the Surviving Corporation to assume all of the
Company&#146;s obligations with respect to all rights to
indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the Effective Time now
existing in favor of the current or former directors or officers
of the Company as provided in the Company Charter, the Company
Bylaws or any indemnification agreement between such directors
or officers and the Company (in each case, as in effect on the
date hereof), without further action, as of the Effective Time,
and such obligations shall survive the Merger and shall continue
in full force and effect in accordance with their terms.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;To the extent not advanced by applicable insurance
carriers, Parent shall, to the fullest extent permitted by
applicable law, cause the Surviving Corporation to advance funds
for expenses (including reasonable attorney&#146;s fees)
incurred by a director in defending a civil or criminal action,
suit or proceeding relating to the indemnification obligations
referenced in the immediately preceding sentence in advance of
the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director to
repay such amount if it shall be ultimately determined that he
or she is not entitled to the indemnification referenced in the
immediately preceding sentence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;For a period of six years after the Effective Time,
Parent shall cause to be maintained in effect the current
policies of directors&#146; and officers&#146; liability
insurance maintained by the Company (provided that Parent may
substitute therefor policies provided or extended by Parent or
the Surviving Corporation, at the sole election of Parent, with
reputable and financially sound carriers of at least the same
coverage and amounts containing terms and conditions which are
no less advantageous in the aggregate) with respect to claims
arising from or related to facts or events which occurred at or
before the Effective Time; provided, however, that Parent or the
Surviving Corporation shall not be obligated to make annual
premium payments for such insurance to the extent such premiums
exceed 300% of the annual premiums paid as of the date hereof by
the Company for such insurance (such 300% amount, the
&#147;Maximum Premium&#148;). If such insurance coverage cannot
be obtained at all, or can only be obtained at an annual premium
in excess of the Maximum Premium, Parent shall maintain the most
advantageous policies, or as determined by Parent in good faith,
of directors&#146; and officers&#146; insurance obtainable for
an annual premium equal to the Maximum Premium.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;The provisions of this Section&nbsp;5.05 (i)&nbsp;are
intended to be for the benefit of, and will be enforceable by,
each indemnified party, his or her heirs and his or her
representatives and (ii)&nbsp;are in addition to, and not in
substitution for, any other rights to indemnification or
contribution that any such person may have by contract or
otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.06&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fees
and Expenses.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;Except as provided in this Section&nbsp;5.06, all fees
and expenses incurred in connection with this Agreement, the
Merger and the other transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated, except for all filing
fees paid in respect of filings made by the Company and Parent
pursuant to the HSR Act in connection with the Merger, with such
filing fees to be borne by Parent. If this Agreement is
terminated by Parent pursuant to Section&nbsp;7.01(c)(i),
Section&nbsp;7.01(e) or Section&nbsp;7.01(h), the Company shall,
promptly following such termination, pay to Parent by wire
transfer of same-day funds an amount equal to all documented,
third-party, out-of-pocket expenses incurred by Parent in
connection with the transactions contemplated by this Agreement,
such amount not to exceed $1,550,000 (the &#147;Parent Expense
Reimbursement&#148;). If this Agreement is terminated
(i)&nbsp;by the Company pursuant to Section&nbsp;7.01(d),
(ii)&nbsp;by Parent pursuant to Section&nbsp;7.01(g), or
(iii)&nbsp;by Parent pursuant to either Section&nbsp;7.01(b)(ii)
or Section&nbsp;7.01(c)(ii), in each case, where the Restraint
at issue is related to any antitrust or unfair competition law,
rule or regulation, then Parent shall, promptly following such
termination, pay to the Company by wire transfer of same-day
funds an amount equal to all documented, third-party,
out-of-pocket expenses incurred by the Company in connection
with the transactions contemplated by this Agreement, including
but not limited to expenses incurred by the Company in
connection with printing, mailing and filing the Proxy
Statement, such amount not to exceed $1,550,000 (the
&#147;Company Expense Reimbursement&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;In the event that (i)&nbsp;this Agreement is terminated
by Parent pursuant to Section&nbsp;7.01(e),
(ii)&nbsp;(A)&nbsp;after the date hereof and prior to the
termination of this Agreement pursuant to Article&nbsp;7, a
Takeover Proposal shall have been made to the Company or shall
have been made directly to the shareholders of the Company
generally or shall have otherwise become publicly known or any
person shall have publicly announced an intention (whether or
not conditional) to make a Takeover Proposal, (B)&nbsp;this
Agreement is terminated by either Parent or the Company pursuant
to Section&nbsp;7.01(b)(i) (but only if a vote to obtain the
Shareholder Approval or the Shareholders&#146; Meeting has not
been held) or Section&nbsp;7.01(b)(iii) (but only if a Takeover
Proposal is publicly announced at or prior to the time of the
Shareholders Meeting) and (C)&nbsp;within 12&nbsp;months after
such termination, the Company enters into a definitive agreement
to consummate, or
</DIV>

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<DIV align="left" style="font-size: 10pt;">
consummates, the transactions contemplated by any Takeover
Proposal, or (iii)&nbsp;the Company terminates this Agreement
pursuant to 7.01(f) then the Company shall pay Parent a fee
equal to $7,000,000 (the &#147;Termination Fee&#148;), plus the
Parent Expense Reimbursement, by wire transfer of same-day funds
on the first business day following (x)&nbsp;in the case of a
payment required by clause&nbsp;(i) or (iii)&nbsp;above, the
date of termination of this Agreement and (y)&nbsp;in the case
of a payment required by clause&nbsp;(ii) above, the date of the
first to occur of the events referred to in clause&nbsp;(ii)(C).
Solely for purposes of clause&nbsp;(ii) hereof, the term
&#147;Superior Proposal&#148; shall have the meaning assigned to
such term in Section&nbsp;4.02(b), except that all references to
&#147;15%&#148; shall be changed to &#147;32%&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;The parties hereto acknowledge and agree that the
agreements contained in Section&nbsp;5.06(a) and (b)&nbsp;are an
integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the parties would
not enter into this Agreement; accordingly, if a party fails
promptly to pay the amount due pursuant to Section&nbsp;5.06(a)
or (b), and, in order to obtain such payment, the other party
commences a suit that results in a judgment against the Company
for the Termination Fee and/or the Parent Expense Reimbursement
or against Parent for the Company Expense Reimbursement, as
applicable, the party against which such judgment is obtained
shall pay to the other party its costs and expenses (including
attorneys&#146; fees and expenses) in connection with such suit,
together with interest on the amount of the Termination Fee, the
Parent Expense Reimbursement and/or the Company Expense
Reimbursement, as applicable, from the date such payment was
required to be made until the date of payment at the prime rate
of Wachovia Bank, N.A. in effect on the date such payment was
required to be made. The Company further acknowledges and agrees
that the Termination Fee represents a reasonable estimate of
future damages, which are uncertain and difficult to quantify,
and does not constitute a penalty. The remedies set forth in
this Section&nbsp;5.06 shall not preclude assertion by any party
of any other rights or the seeking of any other remedies against
any other party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.07&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Public
Announcements.</I> Parent and the Company shall use their
respective reasonable efforts to consult with each other before
issuing, and, to the extent reasonably feasible, give each other
the opportunity to review and comment upon, any press release or
other public statements with respect to the transactions
contemplated by this Agreement and the Shareholder Agreement,
including the Merger, and shall not issue any such press release
or make any such public statement prior to such consultation,
except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national
securities exchange or national securities quotation system. The
parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall
be in the form heretofore agreed to by the parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.08&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Shareholder
Litigation.</I> The Company shall give Parent the opportunity,
at Parent&#146;s own cost, to participate in the defense or
settlement of any shareholder litigation against the Company
and/or its directors relating to the transactions contemplated
by this Agreement or the Shareholder Agreement. No such
settlement in respect of any such litigation shall be agreed to
without Parent&#146;s prior written consent to the extent such
settlement is for an amount which exceeds the Company&#146;s
insurance coverage plus the applicable deductible.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.09&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Shareholder
Agreement Legend.</I> The Company will inscribe upon any
Certificate representing Subject Shares tendered by a
Shareholder (as such terms are defined in the Shareholder
Agreement) for such purpose the following legend: &#147;THE
SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, OF ACTION
PERFORMANCE COMPANIES, INC. REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A SHAREHOLDER AGREEMENT DATED AS OF AUGUST&nbsp;29,
2005, AND ARE SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES OF
ACTION PERFORMANCE COMPANIES, INC.&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Benefit
Plans.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;From the Effective Time through December&nbsp;31, 2006,
except as set forth below, Parent shall provide or cause the
Surviving Corporation to provide to employees of the Company and
its Subsidiaries who remain employed by the Surviving
Corporation and its subsidiaries compensation and employee
benefits that, taken as
</DIV>

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<DIV align="left" style="font-size: 10pt;">
a whole, are comparable in the aggregate to those provided to
such employees immediately prior to the Effective Time;
provided, however, that for this purpose, all bonus arrangements
and equity compensation arrangements shall be disregarded,
except as set forth in Section&nbsp;5.10(d). Parent and the
Company agree and acknowledge that consummation of the
transactions contemplated by this Agreement shall constitute a
&#147;change of control&#148; for purposes of each applicable
Company Benefit Plan and Company Benefit Agreement. Nothing
herein shall be construed to prohibit Parent or the Surviving
Corporation from amending or terminating any Company Benefit
Plan in accordance with the terms thereof and with applicable
law, so long as they comply with the requirements of this
Section&nbsp;5.10.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;From and after the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, honor in accordance
with their respective terms (as in effect on the date of this
Agreement), all the Company Benefit Plans and Company Benefit
Agreements disclosed in the Company Disclosure Schedule
(subject, in each case, to the right of Parent or the Surviving
Corporation to amend or terminate any Company Benefit Plan or
Company Benefit Agreement in accordance with the terms thereof
and with applicable law). For purposes of eligibility and
vesting (but not benefit accrual) under the employee benefit
plans of Parent and its subsidiaries providing benefits after
the Effective Time to any employee of the Company or any
Subsidiary immediately prior to the Effective Time (all such
plans, collectively, the &#147;New Plans&#148;), each such
employee shall be credited with all years of service for which
such employee was credited before the Effective Time under any
comparable Company Benefit Plans, except where such crediting
would lead to a duplication of benefits or to the extent such
service credit is not provided under a newly adopted plan to
similarly situated employees of Parent who were never employees
of the Company and its affiliates. In addition and without
limiting the generality of the foregoing, Parent shall use its
commercially reasonable efforts to (i)&nbsp;cause each employee
of the Company or any Subsidiary as of the Effective Time to be
immediately eligible to participate, without any waiting period,
in any and all New Plans to the extent coverage under any such
New Plan replaces coverage under a comparable Company Benefit
Plan in which such employee participated immediately prior to
the Effective Time (all such plans, collectively, the &#147;Old
Plans&#148;), (ii)&nbsp;for purposes of each New Plan providing
medical, dental, pharmaceutical and/or vision benefits to any
such employee, to cause all pre-existing condition exclusions,
limitations and actively-at-work requirements of such New Plan
to be waived for such employee and his or her covered dependents
(to the extent such exclusions, limitations and actively-at-work
requirements were waived or satisfied as of the Effective Time
under the corresponding Old Plan) and (iii)&nbsp;cause all
deductibles, coinsurance and maximum out-of-pocket expenses
incurred by such employee and his or her covered dependents
under any Old Plan during the portion of the plan year of such
Old Plan ending on the date such employee&#146;s participation
in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible,
co-insurance and maximum out-of-pocket requirements applicable
to such employee and his or her covered dependents for the
applicable plan year as if such amounts had been paid in
accordance with such New Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;Nothing contained herein shall be construed as
requiring Parent or the Surviving Corporation to continue the
employment of any specific person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;In the event that the Closing Date occurs prior to
payment of annual bonuses for the 2005 calendar year, Parent
shall cause the Surviving Corporation to continue to maintain
and honor the Company&#146;s 2005 annual bonus plans set forth
in the Company Disclosure Schedule (the &#147;2005 Bonus
Plans&#148;) for the 2005 calendar year and to pay Company
employees the bonus amounts due under such 2005 Bonus Plans
pursuant to the objective formulae set forth therein (including
formulae approved thereunder by the Company or the Board of
Directors of the Company, or a committee thereof, prior to the
date of this Agreement and previously provided to Parent), based
on the performance of the Company and its operating units,
without adjusting such total for individual performance unless
required by such 2005 Bonus Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;5.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transfer
Taxes.</I> All stock transfer, real estate transfer,
documentary, stamp, recording and other similar taxes (including
interest, penalties and additions to any such taxes) incurred in
connection with the transactions contemplated hereby shall be
paid by the Surviving Corporation.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;6
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Conditions Precedent
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;6.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions
to Each Party&#146;s Obligation to Effect the Merger.</I> The
respective obligation of each party to effect the Merger is
subject to the satisfaction or (to the extent permitted by law)
waiver on or prior to the Closing Date of the following
conditions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Shareholder Approval.</I> The Shareholder Approval
    shall have been obtained.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>HSR Act.</I> The waiting period (and any extension
    thereof) applicable to the Merger under the HSR Act shall have
    been terminated or shall have expired.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;<I>No Injunctions or Restraints.</I> No temporary
    restraining order, preliminary or permanent injunction or other
    judgment or order issued by any court of competent jurisdiction
    or other statute, law, rule, legal restraint or prohibition
    (collectively, &#147;Restraints&#148;) shall be in effect
    (i)&nbsp;preventing the consummation of the Merger or
    (ii)&nbsp;which otherwise would reasonably be expected to have a
    Material Adverse Effect.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;6.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions
to Obligations of Parent and Sub.</I> The obligations of Parent
and Sub to effect the Merger are further subject to the
satisfaction or (to the extent permitted by law) waiver on or
prior to the Closing Date of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Representations and Warranties.</I> The
    representations and warranties of the Company contained in this
    Agreement that are qualified as to materiality shall be true and
    correct, and the representations and warranties of the Company
    contained in this Agreement that are not so qualified shall be
    true and correct in all material respects, in each case as of
    the date of this Agreement and as of the Closing Date as though
    made on the Closing Date, except to the extent such
    representations and warranties expressly relate to an earlier
    date, in which case as of such earlier date. Parent shall have
    received a certificate signed on behalf of the Company by the
    chief executive officer, chief operating officer and the chief
    financial officer of the Company to such effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>Performance of Obligations of the Company.</I> The
    Company shall have performed in all material respects all
    obligations required to be performed by it under this Agreement
    at or prior to the Closing Date, and Parent shall have received
    a certificate signed on behalf of the Company by the chief
    executive officer, chief operating officer and the chief
    financial officer of the Company to such effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;<I>No Litigation.</I> Except as set forth in
    Section&nbsp;3.01(k) of the Company Disclosure Schedule, there
    shall not be pending, or to the knowledge of any party hereto no
    overt, written, credible threat of, any suit, action or
    proceeding by any Governmental Entity, or by any other person,
    having a reasonable likelihood of success, (i)&nbsp;challenging
    the acquisition by Parent or Sub of any shares of Company Common
    Stock, seeking to restrain or prohibit the consummation of the
    Merger, or seeking to place limitations on the ownership of
    shares of Company Common Stock (or shares of common stock of the
    Surviving Corporation) by Parent or Sub or seeking to obtain
    from the Company, Parent or Sub any damages that are material in
    relation to the Company, (ii)&nbsp;seeking to prohibit or
    materially limit the ownership or operation by the Company,
    Parent or any of their respective Subsidiaries of any portion of
    any business or of any assets of the Company, Parent or any of
    their respective Subsidiaries, or to compel the Company, Parent
    or any of their respective Subsidiaries to divest or hold
    separate any portion of any business or of any assets of the
    Company, Parent or any of their respective Subsidiaries, as a
    result of the Merger, or (iii)&nbsp;seeking to prohibit Parent
    or any of its Subsidiaries from effectively controlling in any
    material respect the business or operations of the Company or
    any of its Subsidiaries.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;<I>Restraints.</I> No Restraint that could reasonably
    be expected to result, directly or indirectly, in any of the
    effects referred to in clauses&nbsp;(i) through (iii)&nbsp;of
    paragraph&nbsp;(c)&nbsp;of this Section&nbsp;6.02 shall be in
    effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (e)&nbsp;<I>Fairness Opinion.</I> Parent shall have received an
    executed copy of the opinion of SunTrust Robinson Humphrey
    referred to in Section&nbsp;3.01(x).</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (f)&nbsp;<I>[Reserved]</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (g)&nbsp;<I>Related Party Transactions.</I> All Contracts
    between the Company and any Related Party listed on
    Section&nbsp;6.02(g) of the Company Disclosure Schedule shall
    have been cancelled or terminated, and the Company shall have no
    further liability or obligation with respect to any such
    Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (h)&nbsp;<I>No Material Adverse Change.</I> Except as disclosed
    in the Company Disclosure Schedule, no Material Adverse Effect
    shall have occurred since the date of this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;<I>Audited Financial Statements.</I> The Company shall
    have delivered to Parent audited financial statements, including
    an unqualified opinion of the Company&#146;s independent
    auditors as to its financial statements. For purposes of
    clarification, such auditor&#146;s report need not address (or
    need not be unqualified with respect to) the Company&#146;s
    internal controls.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (j)&nbsp;<I>Internal Controls.</I> The Company shall have
    provided a written representation to Parent setting forth any
    and all deficiencies, significant deficiencies, and/or material
    weaknesses noted in the Company&#146;s compliance efforts with
    Section&nbsp;404 of the Sarbanes-Oxley Act of 2002, as amended
    to date, and a separate written description of remediation
    and/or proposed remediation plans for such deficiencies,
    significant deficiencies, and/or material weaknesses, which
    remediation or proposed remediation plan with respect to any
    identified material weakness would not reasonably be expected to
    prevent a Material Adverse Effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (k)&nbsp;<I>Consents.</I> The Company will obtain (i)&nbsp;the
    consents set forth on Schedule&nbsp;6.02(k)(1) of the Company
    Disclosure Schedule in a form substantially similar to the
    attached, and (ii)&nbsp;the certificates from the Persons set
    forth on Schedule&nbsp;6.02(k)(2) in a form substantially
    similar to the attached.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;6.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions
to Obligation of the Company.</I> The obligation of the Company
to effect the Merger is further subject to the satisfaction or
(to the extent permitted by law) waiver on or prior to the
Closing Date of the following conditions:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Representations and Warranties.</I> The
    representations and warranties of Parent and Sub contained in
    this Agreement that are qualified as to materiality shall be
    true and correct, and the representations and warranties of
    Parent and Sub contained in this Agreement that are not so
    qualified shall be true and correct in all material respects, in
    each case as of the date of this Agreement and as of the Closing
    Date as though made on the Closing Date, except to the extent
    such representations and warranties expressly relate to an
    earlier date, in which case as of such earlier date. The Company
    shall have received a certificate signed on behalf of Parent by
    an executive officer of Parent to such effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>Performance of Obligations of Parent and Sub.</I>
    Parent and Sub shall have performed in all material respects all
    obligations required to be performed by them under this
    Agreement at or prior to the Closing Date, and the Company shall
    have received a certificate signed on behalf of Parent by an
    executive officer of Parent to such effect.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;6.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Frustration
of Closing Conditions.</I> None of the Company, Parent or Sub
may rely on the failure of any condition set forth in
Section&nbsp;6.01, 6.02 or 6.03, as the case may be, to be
satisfied if such failure was caused by such party&#146;s
failure to act in good faith or to use its commercially
reasonable efforts to consummate the Merger and the other
transactions contemplated by this Agreement, as required by and
subject to Section&nbsp;5.03.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;7
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Termination, Amendment and Waiver
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;7.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination.</I>
This Agreement may be terminated at any time prior to the
Effective Time, whether before or after receipt of the
Shareholder Approval:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;by mutual written consent of Parent, Sub and the
    Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;by either Parent or the Company:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;if the Merger shall not have been consummated on or
    before December&nbsp;31, 2005 (the &#147;Outside Date&#148;);
    provided, however, that the right to terminate this Agreement
    under this Section&nbsp;7.01(b)(i) shall not be available to any
    party whose breach of a representation or warranty in this
    Agreement or whose action or failure to act has been a principal
    cause of or resulted in the failure of the Merger to be
    consummated on or before such date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (ii)&nbsp;if any Restraint having any of the effects set forth
    in Section&nbsp;6.01(c) shall be in effect and shall have become
    final and nonappealable; provided, however, that, if such
    Restraint relates to any antitrust or unfair competition law,
    rule or regulation, Parent may only terminate this Agreement
    under this Section&nbsp;7.01(b)(ii) if Parent is in compliance
    with its obligations under Section&nbsp;5.03; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (iii)&nbsp;if the Shareholder Approval shall not have been
    obtained at the Shareholders&#146; Meeting duly convened
    therefor or at any adjournment or postponement thereof;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;by Parent (i)&nbsp;if the Company shall have breached
    or failed to perform any of its representations, warranties,
    covenants or agreements set forth in this Agreement, which
    breach or failure to perform (A)&nbsp;would give rise to the
    failure of a condition set forth in Section&nbsp;6.02(a) or
    6.02(b) and (B)&nbsp;is incapable of being cured, or is not
    cured, by the Company by the Outside Date (provided that neither
    Parent nor Subsidiary is in material breach of any
    representation, warranty, covenant or agreement set forth in
    this agreement) or (ii)&nbsp;if any Restraint having the effects
    referred to in clauses&nbsp;(i) through (iii)&nbsp;of
    Section&nbsp;6.02(c) shall be in effect and shall have become
    final and nonappealable; provided, however, that, if such
    Restraint relates to any antitrust or unfair competition law,
    rule or regulation, Parent may only terminate this Agreement
    under this Section&nbsp;7.01(c)(ii) if Parent is in compliance
    with its obligations under Section&nbsp;5.03;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;by the Company, if Parent or Sub shall have breached or
    failed to perform any of its representations, warranties,
    covenants or agreements set forth in this Agreement, which
    breach or failure to perform (A)&nbsp;would give rise to the
    failure of a condition set forth in Section&nbsp;6.03(a) or
    6.03(b) and (B)&nbsp;is incapable of being cured by Parent or
    Sub (as applicable), or is not cured, by the Outside Date
    (provided that the Company is not then in material breach of any
    representation, warranty, covenant or agreement set forth in
    this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (e)&nbsp;by Parent, in the event that (i)&nbsp;a Company Adverse
    Recommendation Change shall have occurred, (ii)&nbsp;the Board
    of Directors of the Company fails publicly to reaffirm its
    recommendation of this Agreement, the Merger or the other
    transactions contemplated by this Agreement within five business
    days of receipt of a written request by Parent to provide such
    reaffirmation following the receipt by the Company of a Takeover
    Proposal, or (iii)&nbsp;if the Company gives Parent the
    notification referred to in Section&nbsp;7.05(b)(iii);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (f)&nbsp;by the Company prior to receipt of the Shareholder
    Approval in accordance with Section&nbsp;7.05(b); provided,
    however, that the Company shall have complied with all
    provisions thereof, including the notice provisions therein;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (g)&nbsp;by Parent, if Parent is entitled to terminate pursuant
    to Section&nbsp;5.03;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (h)&nbsp;by Parent, if the Company shall have not satisfied the
    conditions set forth in Section&nbsp;6.02(i) or
    Section&nbsp;6.02(j) by the Outside Date; or</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">35

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;by Parent, if the aggregate of all of the amounts
    required to obtain the consents and certificates set forth in
    Section&nbsp;6.02(k) exceed, in the aggregate, $1,000,000;
    provided that expenses, settlement amounts, or damages, in each
    case, arising out of litigation relating to this transaction
    shall be excluded; provided, further, that nothing herein shall
    affect the separate conditions set forth in Section&nbsp;6.01(c)
    or Section&nbsp;6.02(c).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;7.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect
of Termination.</I> In the event of termination of this
Agreement by either the Company or Parent as provided in
Section&nbsp;7.01, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the
part of Parent, Sub or the Company, other than the provisions of
Section&nbsp;3.01(w), the penultimate sentence of
Section&nbsp;5.02, Section&nbsp;5.06, this Section&nbsp;7.02 and
Article&nbsp;8, which provisions shall survive such termination,
and except to the extent that such termination results from the
willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth
in this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;7.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment.</I>
This Agreement may be amended by the parties hereto at any time
before or after receipt of the Shareholder Approval; provided,
however, that after such approval has been obtained, there shall
be made no amendment that by law requires further approval by
the shareholders of the Company or the approval of the
shareholders of Parent without such approval having been
obtained. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;7.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Extension;
Waiver.</I> At any time prior to the Effective Time, the parties
may (a)&nbsp;extend the time for the performance of any of the
obligations or other acts of the other parties, (b)&nbsp;to the
extent permitted by law, waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant hereto or (c)&nbsp;subject to the
proviso to the first sentence of Section&nbsp;7.03 and to the
extent permitted by law, waive compliance with any of the
agreements or conditions contained herein. Any agreement on the
part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf
of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;7.05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Procedure
for Termination or Amendment.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;A termination of this Agreement pursuant to
Section&nbsp;7.01 or an amendment of this Agreement pursuant to
Section&nbsp;7.03 shall, in order to be effective, require, in
the case of Parent or the Company, action by its Board of
Managers or Board of Directors or, with respect to any amendment
of this Agreement pursuant to Section&nbsp;7.03, the duly
authorized committee of its Board of Managers or Board of
Directors to the extent permitted by law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;The Company may terminate this Agreement pursuant to
Section&nbsp;7.01(f) only if (i)&nbsp;the Board of Directors of
the Company has received an unsolicited, bona fide, written
Takeover Proposal which constitutes a Superior Proposal,
(ii)&nbsp;in light of such Superior Proposal a majority of the
disinterested directors of the Company shall have determined in
good faith, after consultation with outside counsel, that the
failure to withdraw or modify its recommendation of the Merger
and this Agreement would violate the Board of Director&#146;s
fiduciary duties to the Company&#146;s stockholders under
applicable law, (iii)&nbsp;the Company has notified Parent in
writing of the determinations described in clause&nbsp;(ii)
above, (iv)&nbsp;at least five business days following receipt
by Parent of the notice referred to in clause&nbsp;(iii) above,
and taking into account any revised proposal made by Parent
since receipt of the notice referred to in clause&nbsp;(iii)
above, such Superior Proposal remains a Superior Proposal and a
majority of the disinterested directors of the Company has again
made the determinations referred to in clause&nbsp;(ii) above,
(v)&nbsp;the Company is in compliance, in all material respects,
with Section&nbsp;4.02, (vi)&nbsp;the Company has previously
paid the fee and reimbursement, as applicable, due under
Section&nbsp;5.06(a) and Section&nbsp;5.06(b), (vii)&nbsp;the
Board of Directors of the Company concurrently approves, and the
Company concurrently enters into, a definitive agreement
providing for the implementation of such Superior Proposal and
(viii)&nbsp;Parent is not at such time entitled to terminate
this Agreement pursuant to Section&nbsp;7.01(c) (assuming for
purposes of this clause&nbsp;(viii)&nbsp;that the Outside Date
is the date of termination of this Agreement by the Company,
except where the applicable breach or failure to perform is not
willful and material and is capable of being cured prior to the
Outside Date).
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
ARTICLE&nbsp;8
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
General Provisions
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nonsurvival
of Representations and Warranties.</I> None of the
representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive
the Effective Time. This Section&nbsp;8.01 shall not limit any
covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notices.</I>
Except for notices that are specifically required by the terms
of this Agreement to be delivered orally, all notices, requests,
claims, demands and other communications hereunder shall be in
writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by overnight courier
(providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice):
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    if to Parent or Sub, to:</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    c/o International Speedway Corporation</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    1801 W International Speedway Blvd.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Daytona Beach, FL 32114-1243</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Telecopy No. (386)&nbsp;947-6884</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Attention: Glenn Padgett, Esquire</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    c/o Speedway Motorsports, Inc.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    5555 Concord Parkway South,</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Concord, NC 28027</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Attention: Laurie Wilks, Esquire</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    with a copy to:</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Three Wachovia Center</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    401 South Tryon Street</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Suite&nbsp;3000</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Charlotte, NC 28202</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Telecopy No. (704)&nbsp;335-9677</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Attention: Fred T. Lowrance, Esquire</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    with a copy to:</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Baker Botts L.L.P.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    The Warner</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    1299 Pennsylvania Ave., NW</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Washington, DC 20004-2400</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Telecopy No.: (202)&nbsp;639-7890</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Attention: Michael A. Gold,&nbsp;Esq.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    if to the Company, to:</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Action Performance Companies, Inc.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    1480 South Hohokam Drive</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Tempe, Arizona 85281</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Attention: Kory Klecker</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    with a copy to:</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Snell&nbsp;&#38; Wilmer L.L.P.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    One Arizona Center</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Phoenix, AZ 85004</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Telecopy No.: 602-382-6070</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Attention: Steven D. Pidgeon,&nbsp;Esq.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Definitions.</I>
For purposes of this Agreement:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;an <I>&#147;Affiliate&#148;</I> of any person means
    another person that directly or indirectly, through one or more
    intermediaries, controls, is controlled by, or is under common
    control with, such first person; provided, that the National
    Association for Stock Car Auto Racing, Inc. and its Affiliates
    shall not be deemed to be Affiliates of Parent for any purpose
    hereunder;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>&#147;Knowledge&#148;</I> of any person that is not
    an individual means, with respect to any matter in question, the
    knowledge of such person&#146;s executive officers and other
    officers, executives and managers having primary responsibility
    for such matter, in each case after due inquiry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;<I>&#147;Material Adverse Effect&#148;</I> means any
    (i)&nbsp;event, (ii)&nbsp;occurrence, (iii)&nbsp;state of facts
    or (iv)&nbsp;development or developments which individually or
    in the aggregate would reasonably be expected to result in any
    change or effect, that (A)&nbsp;is materially adverse to the
    business, properties, assets (including license agreements),
    liabilities (contingent or otherwise), financial condition or
    results of operations of the Company and its Subsidiaries, taken
    as a whole, or (B)&nbsp;would reasonably be expected to prevent
    or materially impede, interfere with, hinder or delay the
    consummation by the Company of the Merger or the other
    transactions contemplated by this Agreement; provided, however,
    that a Material Adverse Effect with respect to the Company shall
    not include any event, occurrence, state of facts or development
    arising out of or relating to (1)&nbsp;general economic
    conditions in the United States of America, (2)&nbsp;conditions
    generally affecting industries in which any of the Company or
    its Subsidiaries operates (except, in the case of
    clauses&nbsp;(1) and (2)&nbsp;above, if the event, change,
    effect, development, condition or occurrence disproportionately
    impacts the business, assets or financial condition of the
    Company and its Subsidiaries, taken as a whole), (3)&nbsp;the
    public announcement of this Agreement or the consummation of the
    transactions contemplated hereby (including, without limitation,
    any loss of customers, employees, suppliers, licensees or
    distributors of the Company or any Subsidiary as a result
    thereof, or changes arising out of, or attributable to, any such
    loss) or (4)&nbsp;conditions specifically identified in the
    Filed Company SEC Documents the effect of which is reasonably
    determinable from the information contained therein; and
    provided, further, that (x)&nbsp;any change in the
    Company&#146;s stock price or trading volume or (y)&nbsp;any
    failure, in and of itself, of the Company to meet its internal
    financial projections or published analysts&#146; forecasts
    relating to it, or any other amount of revenues or earnings of
    the Company shall each not, individually or collectively, be
    deemed to constitute a Material Adverse Effect (it being
    understood that the circumstances giving rise to any such
    failure may constitute a Material Adverse Effect); provided,
    further, that for purposes of analyzing whether any event,
    occurrence, state of facts or development constitutes a
    &#147;Material Adverse Effect&#148; under this definition, the
    parties agree that (x)&nbsp;Parent will be deemed to have no
    knowledge of any state of facts, effect, condition, development,
    event or occurrence that is not (A)&nbsp;disclosed in
    Section&nbsp;3.01(j) of the Company Disclosure Schedule or
    (B)&nbsp;specifically identified in the Filed Company SEC
    Documents the effect of which is reasonably determinable from
    the information contained therein, (y)&nbsp;the analysis of
    materiality shall not be limited to either a long-term or a
    short-term perspective, and (z)&nbsp;each of the terms contained
    in clauses&nbsp;(i) through (iv)&nbsp;above are intended to be
    separate and distinct;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;<I>&#147;person&#148;</I> means an individual,
    corporation, partnership, limited liability company, joint
    venture, association, trust, unincorporated organization or
    other entity;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (e)&nbsp;a <I>&#147;Subsidiary&#148;</I> of any person means
    another person, an amount of the voting securities, other voting
    rights or voting partnership interests of which is sufficient to
    elect at least a majority of its board of directors or other
    governing body (or, if there are no such voting interests, 50%
    or more of the equity interests of which) is owned directly or
    indirectly by such first person.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interpretation.</I>
When a reference is made in this Agreement to an Article, a
Section, Exhibit or Schedule, such reference shall be to an
Article of, a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words
&#147;include&#148;, &#147;includes&#148; or
&#147;including&#148; are used in this Agreement, they shall be
deemed to be followed by the words &#147;without
limitation&#148;. The words &#147;hereof&#148;,
&#147;herein&#148; and &#147;hereunder&#148; and words of
</DIV>

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<DIV align="left" style="font-size: 10pt;">
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. References to &#147;this Agreement&#148; shall
include the Company Disclosure Schedule and the Parent
Disclosure Schedule. All terms defined in this Agreement shall
have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a
person are also to its permitted successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Consents
and Approvals.</I> For any matter under this Agreement requiring
the consent or approval of any party to be valid and binding on
the parties hereto, such consent or approval must be in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.06&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Counterparts.</I>
This Agreement may be executed in one or more counterparts
(including by facsimile), all of which shall be considered one
and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and
delivered to the other parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.07&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Entire
Agreement; No Third-Party Beneficiaries.</I> This Agreement, the
Shareholder Agreement and the Confidentiality Agreement
(a)&nbsp;constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this
Agreement, the Shareholder Agreement and the Confidentiality
Agreement and (b)&nbsp;except for the provisions of
Article&nbsp;2 upon, but not before, the completion of the
Merger, and Section&nbsp;5.05, are not intended to confer upon
any person other than the parties any legal or equitable rights
or remedies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.08&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Governing
Law.</I> This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona, regardless of
the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.09&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Assignment.</I>
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the
prior written consent of the other parties, and any assignment
without such consent shall be null and void, except that either
of Parent or Sub may assign, in its sole discretion, any or all
of its rights, interests and obligations under this Agreement to
an Affiliate it directly or indirectly wholly owns or by which
it is directly or indirectly wholly owned, but no such
assignment shall relieve Parent or Sub of any of its obligations
hereunder. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and
assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Specific
Enforcement; Consent to Jurisdiction.</I> The parties agree that
irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this
Agreement in any Federal court located in the State of Arizona
or in any state court in the State of Arizona, this being in
addition to any other remedy to which they are entitled at law
or in equity. In addition, each of the parties hereto
(a)&nbsp;consents to submit itself to the personal jurisdiction
of any Federal court located in the State of Arizona or of any
state court located in the State of Arizona in the event any
dispute arises out of this Agreement or the transactions
contemplated by this Agreement, (b)&nbsp;agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and
(c)&nbsp;agrees that it will not bring any action relating to
this Agreement or the transactions contemplated by this
Agreement in any court other than a Federal court located in the
State of Arizona or a state court located in the State of
Arizona.
</DIV>

<P align="center" style="font-size: 10pt;">39

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Severability.</I>
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an
acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-variant:SMALL-CAPS">Section</FONT>&nbsp;8.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Guaranty.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;Each Guarantor hereby unconditionally and irrevocably
guarantees severally, but not jointly, to the Company the due
and punctual performance of each of the obligations and the
undertakings of Parent and Sub under this Agreement when and to
the extent the same are required to be performed and subject to
all of the terms and conditions hereof; provided, however, that
each Guarantor&#146;s liability under this Agreement shall be
limited to the portion of such liability equal to its pro rata
percentage ownership of Parent as listed on Section&nbsp;8.12 of
the Parent Disclosure Schedule; and provided, further that no
Guarantor shall have any liability whatsoever under this
guaranty after the Closing, whether based upon events occurring
prior to or after the Closing. If Parent or Sub shall fail to
perform fully and punctually any obligation or undertaking of
Parent or Sub under this Agreement when and to the extent the
same is required to be performed, subject to the first sentence
of this Section&nbsp;8.12(a), each Guarantor will, upon written
demand from the Company, forthwith perform or cause to be
performed such obligation or undertaking, as the case may be.
The obligations of each Guarantor under this guaranty shall
constitute an absolute and unconditional present and continuing
guarantee of performance to the extent provided herein, and
shall not be contingent upon any attempt by the Company to
enforce performance by Parent or Sub.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;Subject to 8.12(a), the obligations of each Guarantor
under this guaranty are absolute and unconditional, are not
subject to any counterclaim, set off, deduction, abatement or
defense based upon any claim a Guarantor may have against the
Company (except for any defense Parent or Sub may have against
the Company under the terms of this Agreement), and shall remain
in full force and effect without regard to (i)&nbsp;any
agreement or modification to any of the terms of this Agreement
or any other agreement which may hereafter be made relating
thereto; (ii)&nbsp;any exercise, non-exercise, or waiver by the
Company of any right, power, privilege or remedy under or in
respect of this Agreement; (iii)&nbsp;any insolvency,
bankruptcy, dissolution, liquidation, reorganization or the like
of Parent or Sub at or prior to the Closing; (iv)&nbsp;absence
of any notice to, or knowledge by, a Guarantor of the existence
or occurrence of any of the matters or events set forth in the
foregoing clauses&nbsp;(i) through (iii); (v)&nbsp;any transfer
of shares of capital stock of Parent or Sub, or any assignment
by Parent or Sub of its rights and obligations under this
Agreement, to a wholly-owned subsidiary of Parent or Sub or a
Guarantor; or (vi)&nbsp;any other circumstance, whether similar
or dissimilar to the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;Each Guarantor unconditionally waives (i)&nbsp;any and
all notice of default, non-performance or non-payment by Parent
or Sub under this Agreement, and (ii)&nbsp;all notices which may
be required by statute, rule of law or otherwise to preserve
intact any rights of the Company against a Guarantor, including,
without limitation, any demand, presentment or protest, or proof
of notice of non-payment under this Agreement.
</DIV>

<P align="center" style="font-size: 10pt;">40

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers hereunto
duly authorized, all as of the date first written above.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    SMISC, LLC</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Marcus G. Smith</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Marcus G. Smith <BR>
     Title:&nbsp;&nbsp;&nbsp;Vice President</TD>
</TR>

<TR>
    <TD style="font-size: 24pt">&nbsp;</TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    MOTORSPORTS AUTHENTICS, INC.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Glenn R. Padgett</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Glenn R. Padgett</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Title:&nbsp;&nbsp;&nbsp;Authorized Officer</TD>
</TR>

<TR>
    <TD style="font-size: 24pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    ACTION PERFORMANCE COMPANIES, INC.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Fred Wagenhals</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Fred Wagenhals</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Title:&nbsp;&nbsp;&nbsp;Chief Executive Officer</TD>
</TR>

<TR>
    <TD style="font-size: 24pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Guarantors:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    SPEEDWAY MOTORSPORTS, INC.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Marcus G. Smith</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Marcus G. Smith</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="8%"></TD>
    <TD width="52%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD align="left">
    Executive Vice President,</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    National Sales&nbsp;&#38; Marketing</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">41

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<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    INTERNATIONAL SPEEDWAY CORPORATION</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Glenn R. Padgett</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Glenn R. Padgett</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="8%"></TD>
    <TD width="52%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD align="left">
    Vice President and Chief Counsel Operations</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
[Signature Page to Agreement and Plan of Merger]
</DIV>

<P align="center" style="font-size: 10pt;">42

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<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>ANNEX I</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TO THE MERGER AGREEMENT</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INDEX OF DEFINED TERMS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005 Bonus Plan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.10(d)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition Agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.02(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.01(d)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Affiliate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;8.03(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Arizona Code</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.01</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Articles of Merger</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.03</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Certificate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Closing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.02</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Closing Date</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.02</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Code</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.02(h)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commonly Controlled Entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(o)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Adverse Recommendation Change</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.02(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Benefit Agreements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(j)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Benefit Plans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(o)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Bylaws</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Charter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.05(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Common Stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Consolidated Group</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(r)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Disclosure Schedule</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Expense Reimbursement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.06(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Pension Plan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(p)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Preferred Stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company SEC Documents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(g)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Stock-Based Awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Stock Options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Company Stock Plans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Confidentiality Agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.02</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Contract</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(e)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effective Time</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.03</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Environmental Laws</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(n)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ERISA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(m)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exchange Act</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exchange Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.02(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Filed Company SEC Documents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(h)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(g)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Governmental Entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hazardous Materials</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(n)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HSR Act</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HSR Filing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.03</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intellectual Property Rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(t)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IRS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(p)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Knowledge</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;8.03(b)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">43

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal Provisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(m)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Material Adverse Effect</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;8.03(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Maximum Premium</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.05(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Merger</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Merger Consideration</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Moody&#146;s</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.2.02(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    New Plans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.10(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Old Plans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.10(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Option and Warrant Consideration</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.01(d)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outside Date</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;7.01(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Parachute Gross Up Payment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(q)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Parent</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Parent Disclosure Schedule</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.02</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Parent Expense Reimbursement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.06(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Paying Agent</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.02(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Permits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(m)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    person</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;8.03(d)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Post-Signing Returns</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.01(d)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Primary Company Executives</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(q)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal Shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proxy Statement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related Party</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(g)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related Party Transaction</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(g)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Release</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(n)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Representatives</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.02(a)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restraints</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;6.01(c)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    S&#38;P</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;2.02(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SEC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(f)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Securities Act</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(g)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholder Agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholder Approval</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(u)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; Meeting</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.01(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Preamble</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;8.03(e)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Superior Proposal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.02(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Surviving Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;1.01</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Takeover Proposal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;4.02(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    tax returns</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(r)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(r)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Taxing authority</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(r)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Termination Fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;5.06(b)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury Regulations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(r)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Warrants</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Section&nbsp;3.01(c)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">44

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="right" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>EXHIBIT A</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TO THE MERGER AGREEMENT</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>ARTICLES OF INCORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>OF THE SURVIVING CORPORATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>FIRST:</I> The name of the corporation (hereinafter called
the &#147;Corporation&#148;) is Motorsports Authentics, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>SECOND:</I> The name and address of the statutory agent of
the Corporation is Corporation Trust Company, [Address]. This
address will also be the corporation&#146;s known place of
business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>THIRD:</I> The character of business that the Corporation
initially intends to conduct in the State of Arizona is
manufacturing, licensing and selling motorsports and other
collectibles and consumer items, and all manner of activity
related thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>FOURTH:</I> The aggregate number of shares which the
Corporation shall have authority to issue is 1,000&nbsp;shares
of Common Stock, par value $.01&nbsp;per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>FIFTH:</I> To the fullest extent permitted by the Arizona
Business Corporation Act as it now exists and as it may
hereafter be amended, no director of the Corporation shall be
personally liable to the Corporation or any of its stockholders
for monetary damages for any action taken or any failure to take
any action as a director,; provided, however, that nothing
contained in this Article&nbsp;FIFTH shall eliminate or limit
the liability of a director or officer for (a)&nbsp;the amount
of a financial benefit received by a director to which the
director is not entitled, (b)&nbsp;an intentional infliction of
harm on the corporation or the shareholders, (c)&nbsp;a
violation of section A.R.S. Section&nbsp;10-833, or (d)&nbsp;an
intentional violation of criminal law. No amendment to or repeal
of this Article&nbsp;FIFTH shall apply to or have any effect on
the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>SIXTH:</I> The Corporation shall, to the fullest extent
permitted by A.R.S. Sections&nbsp;10-850 through 10-858, as the
same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said
Sections from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said
Sections. Such indemnification shall be mandatory and not
discretionary. The indemnification provided for herein shall not
be deemed exclusive of any other rights to which those
indemnified may be entitled under any Bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to
action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person. Any repeal or
modification of this Article&nbsp;SIXTH shall not adversely
affect any right to indemnification of any persons existing at
the time of such repeal or modification with respect to any
matter occurring prior to such repeal or modification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>SEVENTH:</I> Unless and except to the extent that the Bylaws
of the Corporation shall so require, the election of directors
of the Corporation need not be by written ballot.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>EIGHTH:</I> The initial board of directors shall consist of
four members. The names and addresses of the persons who are to
serve as the members of the board of directors until their
successors are elected and qualify are:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Lesa France Kennedy</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    c/o&nbsp;International Speedway Corporation</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    1801&nbsp;W.&nbsp;International Speedway Blvd.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Daytona Beach, FL 32114</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">45

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    John R. Saunders</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    c/o&nbsp;International Speedway Corporation</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    1801&nbsp;W.&nbsp;International Speedway Blvd.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Daytona Beach, FL 32114</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Mark M. Gambill</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    c/o&nbsp;Speedway Motorsports, Inc.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    5555 Concord Parkway South</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Concord, NC 28027</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Marcus Smith</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    c/o&nbsp;Speedway Motorsports, Inc.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    5555 Concord Parkway South</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Concord, NC 28027</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>NINTH:</I> The name and address of the incorporator is:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>


<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Name:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Address:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All powers, duties and responsibilities of the incorporator
shall cease at the time of delivery of these Articles of
Incorporation to the Arizona Corporation Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
EXECUTED this 28th&nbsp;day of August 2005 by
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT style="font-size: 10pt">Name:&nbsp;<DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV>
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<P align="center" style="font-size: 10pt;">46
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>APPENDIX B</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="p71264prp7126400.gif" alt="(LOGO)">
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
August&nbsp;28, 2005
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Board of Directors
</DIV>

<DIV align="left" style="font-size: 10pt;">
Action Performance Companies, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt;">
1480 South Hohokam Drive
</DIV>

<DIV align="left" style="font-size: 10pt;">
Tempe, Arizona 85281
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Ladies and Gentlemen:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We understand that Action Performance Companies, Inc. (the
Company) intends to merge with White Cliffs Alliance, LLC
(&#147;Parent&#148;), a joint venture between International
Speedway Corporation (&#147;ISC&#148;) and Speedway Motorsports,
Inc. (&#147;SMI&#148;). In the merger, common stockholders of
the Company will receive $13&nbsp;per share in cash for each
share of Company common stock outstanding (the &#147;Proposed
Transaction&#148;). The terms and conditions of the Proposed
Transaction are set forth in more detail in the Agreement and
Plan of Merger (the &#147;Agreement&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have been requested by the Company to render our opinion to
the Board of Directors of the Company with respect to the
fairness, from a financial point of view, to the Company&#146;s
stockholders of the consideration to be offered in the Proposed
Transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In arriving at our opinion, we reviewed and analyzed: (1)&nbsp;a
draft of the Agreement dated August&nbsp;28, 2005;
(2)&nbsp;publicly available information concerning the Company
which we believe to be relevant to our inquiry;
(3)&nbsp;financial and operating information with respect to the
business, operations and prospects of the Company furnished to
us by the Company; (4)&nbsp;a trading history of the
Company&#146;s common stock from August, 2000 to the present and
a comparison of that trading history with those of other
publicly traded companies which we deemed relevant; (5)&nbsp;a
comparison of the historical financial results and present
financial condition of the Company with those of publicly traded
companies which we deemed relevant; (6)&nbsp;historical data
relating to percentage premiums paid in acquisitions of publicly
traded companies; (7)&nbsp;a comparison of the financial terms
of the Proposed Transaction with the publicly available
financial terms of certain other recent transactions which we
deemed relevant. In addition, we have had discussions with the
management of the Company concerning its business, operations,
assets, present condition and future prospects and undertook
such other studies, analyses and investigations as we deemed
appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have assumed and relied upon, without independent
verification, the accuracy and completeness of the financial and
other information discussed with or reviewed by us in arriving
at our opinion. With respect to the financial forecasts of the
Company provided to or discussed with us, we have assumed, at
the direction of the management of the Company and without
independent verification or investigation, that such forecasts
have been reasonably prepared on bases reflecting the best
currently available information, estimates and judgments of the
management of the Company as to the future financial performance
of the Company. In arriving at our opinion, we have conducted
only a limited physical inspection of the properties and
facilities of the Company and have not made nor obtained any
evaluations or appraisals of the assets or liabilities
(including, without limitation, any potential environmental
liabilities), contingent or otherwise, of the Company. We have
assumed that the Proposed Transaction will be consummated in
accordance with the terms of the Agreement. We have also assumed
that all material governmental, regulatory or other consents and
approvals necessary for the consummation of the Proposed
Transaction will be obtained without any adverse effect on the
Company. Our opinion is necessarily based upon market, economic
and other conditions
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<DIV align="center" style="font-size: 8pt;">
SunTrust Robinson Humphrey Capital Markets&nbsp;&nbsp;&nbsp;3333
Peachtree Road, NE&nbsp;&nbsp;&nbsp;Atlanta, GA
30326&nbsp;&nbsp;&nbsp;www.SunTrustRH.com&nbsp;&nbsp;&nbsp;ph:&nbsp;404.926.5000
</DIV>

<DIV align="center" style="font-size: 8pt;">
Member New York Stock Exchange, Inc.
</DIV>

<P align="center" style="font-size: 10pt;">B-1

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<DIV align="left" style="font-size: 10pt;">
as they exist on, and can be evaluated as of, the date of this
letter. We express no opinion as to the underlying valuation,
future performance or long-term viability of the Company or
Parent. It should be understood that, although subsequent
developments may affect this opinion, we do not have any
obligation to update or revise the opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have acted as financial advisor to the Company in connection
with the Proposed Transaction and will receive a fee for our
services, a portion of which is contingent upon the consummation
of the Proposed Transaction. In addition, the Company has agreed
to indemnify us for certain liabilities arising out of the
rendering of this opinion. In the ordinary course of our
business, we and our affiliates actively trade in the debt and
equity securities of the Company for our own account and for the
accounts of our customers and, accordingly, may at any time hold
a long or short position in such securities. In addition, we and
our affiliates (including SunTrust Banks, Inc.) may have other
financing and business relationships with the Company, ISC and
SMI in the ordinary course of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based upon and subject to the foregoing, and such other factors
as we deemed relevant, we are of the opinion as of the date
hereof that, from a financial point of view,<B> </B>the
consideration to be offered in the Proposed Transaction is fair
to the common stockholders of the Company. This opinion is being
rendered at the behest of the Board of Directors and is for the
benefit of the Board and stockholders in their evaluation of the
Proposed Transaction, and does not constitute a recommendation
as to how any stockholder should act or vote with respect to any
matters relating to the Proposed Transaction.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <B>SUNTRUST ROBINSON HUMPHREY</B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <B>SUNTRUST CAPITAL MARKETS, INC.</B></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">B-2
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>APPENDIX C</B>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>EXECUTION COPY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SHAREHOLDER AGREEMENT dated as of August&nbsp;29, 2005, (this
&#147;Agreement&#148;), among SMISC, LLC, a Delaware limited
liability company (&#147;Parent&#148;), and the individuals and
other parties listed on Schedule&nbsp;A attached hereto (each, a
&#147;Shareholder&#148; and, collectively, the
&#147;Shareholders&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, Parent, Motorsports Authentics, Inc., a Delaware
corporation and a indirect wholly owned Subsidiary of Parent
(&#147;Sub&#148;), and Action Performance Companies, Inc., an
Arizona corporation (&#147;Company&#148;), propose to enter into
an Agreement and Plan of Merger dated as of the date hereof (as
the same may be amended or supplemented, the &#147;Merger
Agreement&#148;) providing for the merger of Sub with and into
the Company (the &#147;Merger&#148;), upon the terms and subject
to the conditions set forth in the Merger Agreement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, each Shareholder owns the number of shares of common
stock, par value $.01&nbsp;per share, of the Company (the
&#147;Company Common Stock&#148;) set forth opposite his, her or
its name on Schedule&nbsp;A attached hereto (such shares of
Company Common Stock, together with any other shares of capital
stock of the Company acquired by such Shareholder after the date
hereof and during the term of this Agreement (including through
the exercise of any stock options, warrants or similar
instruments), being collectively referred to herein as the
&#147;Subject Shares&#148; of such Shareholder);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, the Board of Directors of the Company has unanimously
approved the terms of this Agreement;&nbsp;and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Parent has requested that each Shareholder
enter into this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NOW, THEREFORE, to induce Parent to enter into, and in
consideration of its entering into, the Merger Agreement, and in
consideration of the mutual promises and the representations,
warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations and
Warranties of Each Shareholder.</I> Each Shareholder hereby,
severally and not jointly, represents and warrants to Parent as
of the date hereof in respect of himself, herself or itself as
follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;<I>Authority, Execution and Delivery;
    Enforceability.</I> The Shareholder has all requisite power and
    authority to enter into this Agreement and to consummate the
    transactions contemplated hereby. This Agreement has been duly
    authorized, executed and delivered by the Shareholder and,
    assuming this Agreement constitutes the legal, valid and binding
    obligation of Parent, constitutes the legal, valid and binding
    obligation of the Shareholder, enforceable against the
    Shareholder in accordance with its terms. Except for the
    expiration or termination of the waiting periods under the HSR
    Act and informational filings with the SEC, the execution and
    delivery by the Shareholder of this Agreement do not, and the
    consummation of the transactions contemplated hereby and
    compliance with the terms hereof will not, conflict with, or
    result in any violation of, or default (with or without notice
    or lapse of time or both) under, or give rise to a right of
    termination, cancellation or acceleration of any obligation or
    to loss of a material benefit under, or result in the creation
    of any Lien upon any of the Subject Shares of the Shareholder
    under, (i)&nbsp;any trust agreement, loan or credit agreement,
    bond, note, mortgage, indenture, lease or other contract,
    agreement, obligation, commitment, arrangement, understanding or
    instrument, (collectively, &#147;Contracts&#148;) to which the
    Shareholder is a party or by which any of the Subject Shares of
    the Shareholder is bound or (ii)&nbsp;subject to the filings and
    other matters referred to in the next sentence, any provision of
    any judgment, order or decree (collectively,
    &#147;Judgment&#148;) or any statute, law, ordinance, rule or
    regulation (collectively, &#147;Applicable Law&#148;) applicable
    to the Subject Shares of the Shareholder. No consent, approval,
    order or authorization (collectively, &#147;Consent&#148;) of,
    action by or in respect of, or registration, declaration or
    filing with, any Governmental Entity is required to be obtained
    or made by or with respect to the Shareholder in connection with
    the execution, delivery and performance by the Shareholder of
    this Agreement or the consummation by the Shareholder of the
    transactions contemplated hereby, other than (i)&nbsp;compliance
    with and filings under the HSR Act, if applicable to the
    Shareholder&#146;s receipt in the Merger of the Merger
    Consideration, (ii)&nbsp;such reports under Sections 13(d)</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">C-1

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">
    and 16 of the Exchange Act as may be required in connection with
    this Agreement and the transactions contemplated hereby and
    (iii)&nbsp;where the failure to obtain such Consent or action,
    or to make such registration, declaration or filing, could not
    reasonably be expected to prevent, materially impede or delay
    the performance by the Shareholder of its obligations under this
    Agreement. If the Shareholder is a natural person and is
    married, and the Shareholder&#146;s Subject Shares constitute
    community property or otherwise need spousal or other approval
    for this Agreement to be legal, valid and binding, this
    Agreement has been duly authorized, executed and delivered by,
    and constitutes a valid and binding agreement of, the
    Shareholder&#146;s spouse, enforceable against such spouse in
    accordance with its terms. No trust of which such Shareholder is
    a trustee requires the consent of any beneficiary to the
    execution and delivery of this Agreement or to the consummation
    of the transactions contemplated hereby.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;<I>The Subject Shares.</I> The Shareholder is the
    record and beneficial owner of, or is trustee of a trust that is
    the record holder of, and whose beneficiaries are the beneficial
    owners of, and has good and marketable title to, the Subject
    Shares set forth opposite his, her or its name on
    Schedule&nbsp;A attached hereto, free and clear of any Liens.
    The Shareholder does not own, of record or beneficially, any
    shares of capital stock of the Company other than the Subject
    Shares set forth opposite his, her or its name on
    Schedule&nbsp;A attached hereto. The Shareholder has the sole
    right to vote such Subject Shares (except to the extent that
    such Subject Shares are issuable upon the exercise of options or
    Warrants that have not been exercised by such Shareholder), and,
    except as contemplated by this Agreement, none of such Subject
    Shares is subject to any voting trust or other agreement,
    arrangement or restriction with respect to the voting of such
    Subject Shares.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations and
Warranties of Parent.</I> Parent hereby represents and warrants
to each Shareholder that Parent (i)&nbsp;is duly formed, validly
existing and in good standing under the laws of the State of
Delaware, and (ii)&nbsp;has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized. The execution and delivery by Parent of this
Agreement and consummation by Parent of the transactions
contemplated hereby have been duly authorized by all necessary
limited liability company action on the part of Parent. Parent
has duly executed and delivered this Agreement, and, assuming
this Agreement constitutes the legal, valid and binding
obligation of each of the other parties hereto, this Agreement
constitutes a valid and binding obligation of Parent enforceable
against Parent in accordance with its terms. The execution and
delivery by Parent of this Agreement do not, and the
consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, conflict with, or
result in any violation of, or default (with or without notice
or lapse of time or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or
to loss of a material benefit under, (i)&nbsp;the Certificate of
Formation or Limited Liability Company Agreement of Parent,
(ii)&nbsp;any Contract to which Parent is a party or by which
any properties or assets of Parent are bound in any way that
would prevent the consummation by Parent of the transactions
contemplated by this Agreement or (iii)&nbsp;subject to the
filings and other matters referred to in the next sentence, any
provision of any Judgment or Applicable Law applicable to Parent
or the properties or assets of Parent, in any way that would
prevent the consummation by Parent of the transactions
contemplated by this Agreement. No Consent of, action by or in
respect of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or
with respect to Parent in connection with the execution,
delivery and performance of this Agreement or the consummation
of the transactions contemplated hereby. There is no suit,
action, investigation or proceeding pending or, to the knowledge
of Parent, threatened against or affecting Parent or any of its
Affiliates before or by any Governmental Authority that could
reasonably be expected to materially impair the ability of
Parent to perform its obligations hereunder or to consummate the
transactions contemplated hereby on a timely basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Covenants of Each
Shareholder.</I> Each Shareholder, acting as a shareholder of
the Company and not as an officer or director of the Company,
severally and not jointly, agrees as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;Without in any way limiting each Shareholder&#146;s
    right to vote its Subject Shares in its sole discretion with
    respect to any other matters, at any meeting of shareholders of
    the Company called to vote upon the Merger and the Merger
    Agreement or at any adjournment thereof or in any other
    circumstances upon which a vote, consent or other approval
    (including by written consent) with respect to the Merger</TD>
</TR>

</TABLE>

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    <TD>&nbsp;</TD>
    <TD align="left">
    and the Merger Agreement is sought, the Shareholder shall,
    including by executing a written consent if requested by Parent,
    vote (or cause to be voted) the Subject Shares in favor of the
    Merger, the adoption by the Company of the Merger Agreement and
    the approval of the terms thereof and each of the other
    transactions contemplated by the Merger Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;Notwithstanding the foregoing paragraph&nbsp;(a), each
    Shareholder may decline to vote, or cause to be voted, the
    Subject Shares in favor of the Merger, if (i)&nbsp;without the
    prior written consent of such Shareholder, the Merger Agreement
    shall be amended to (A)&nbsp;reduce the price per share to be
    paid for the Subject Shares to less than $13.00&nbsp;per share,
    net to the seller in cash, (B)&nbsp;change the form of
    consideration payable in the Merger Agreement, or (C)&nbsp;amend
    or modify any term or condition of the Merger Agreement in a
    manner adverse to the shareholders of the Company; or
    (ii)&nbsp;any Governmental Entity shall have issued a final,
    nonappealable order, decree or ruling or taken any other action
    permanently restraining, enjoining, or otherwise prohibiting
    such Shareholder from tendering Shares.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;At any meeting of shareholders of the Company or at any
    adjournment thereof or in any other circumstances upon which the
    Shareholder&#146;s vote, consent or other approval is sought,
    the Shareholder shall vote (or cause to be voted) the Subject
    Shares against (i)&nbsp;any merger agreement or merger (other
    than the Merger Agreement and the Merger), consolidation,
    combination, sale of substantial assets, reorganization,
    recapitalization, dissolution, liquidation or winding up of or
    by the Company or any other Takeover Proposal or (ii)&nbsp;any
    amendment of the Company&#146;s First Amended and Restated
    Articles of Incorporation or Bylaws or other proposal or
    transaction involving the Company, in each case which proposal,
    transaction or amendment would in any manner impede, frustrate,
    prevent or nullify, or result in a breach of any covenant,
    representation or warranty or any other obligation of the
    Company under or with respect to, the Merger, the Merger
    Agreement or any of the other transactions contemplated by the
    Merger Agreement or change in any manner the voting rights of
    the Company Common Stock. The Shareholder shall not commit or
    agree to take any action inconsistent with the foregoing.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;The Shareholder shall not (i)&nbsp;sell, transfer,
    pledge, assign or otherwise dispose of (including by gift)
    (collectively, &#147;Transfer&#148;), consent to any Transfer
    of, or enter into any Contract, option or other arrangement
    (including any profit sharing arrangement) with respect to the
    Transfer of, any Subject Shares (or any interest therein) to any
    person other than pursuant to the terms of the Merger or
    (ii)&nbsp;enter into any voting arrangement, whether by proxy,
    voting agreement or otherwise, with respect to any Subject
    Shares other than pursuant to this Agreement and shall not
    commit or agree to take any of the foregoing actions. The
    Shareholder shall not, nor shall such Shareholder permit any
    entity under such Shareholder&#146;s control to, deposit any
    Subject Shares in a voting trust.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (e)&nbsp;The Shareholder shall not, nor shall it authorize or
    permit any employees or Affiliates of, or any investment banker,
    financial advisor, attorney, accountant or other advisor, agent
    or representative of, the Shareholder (collectively, the
    &#147;Shareholder Representatives&#148;) to, directly or
    indirectly through any person or entity, (i)&nbsp;solicit,
    initiate or encourage, or knowingly take any other action
    designed to, or which would reasonably be expected to,
    facilitate, any inquiries or the making of any proposal that
    constitutes or would reasonably be expected to lead to a
    Takeover Proposal or (ii)&nbsp;enter into, continue or otherwise
    participate in any discussions or negotiations regarding, or
    furnish to any person any non-public information with respect
    to, any Takeover Proposal. Without limiting the foregoing, it is
    agreed that any violation of the restrictions set forth in the
    preceding sentence by any Shareholder Representative of such
    Shareholder, whether or not such person is purporting to act on
    behalf of such Shareholder, shall be a breach of this
    Section&nbsp;3(e) by such Shareholder. The Shareholder shall
    promptly advise Parent orally and in writing of any Takeover
    Proposal or inquiry made to the Shareholder with respect to any
    Takeover Proposal.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (f)&nbsp;Until the earlier of (i)&nbsp;the consummation of the
    Merger and (ii)&nbsp;termination of the Merger Agreement
    pursuant to its terms, the Shareholder shall use all reasonable
    efforts to take, or cause to be taken, all actions, and to do,
    or cause to be done, and to assist and cooperate with the other
    parties in doing, all things necessary, proper or advisable to
    consummate and make effective, in the most expeditious manner
    practicable, the Merger and the other transactions contemplated
    by the Merger</TD>
</TR>

</TABLE>

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    <TD>&nbsp;</TD>
    <TD align="left">
    Agreement. The Shareholder shall not issue any press release or
    make any other public statement with respect to this Agreement,
    the Merger Agreement, the Merger or any other transaction
    contemplated by this Agreement or the Merger Agreement without
    the prior written consent of Parent, except as may be required
    by Applicable Law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (g)&nbsp;The Shareholder, and any beneficiary of a revocable
    trust for which such Shareholder serves as trustee, shall not
    take any action to revoke or terminate such trust or take any
    other action which would restrict, limit or frustrate in any way
    the transactions contemplated by this Agreement. Each such
    beneficiary hereby acknowledges and agrees to be bound by the
    terms of this Agreement applicable to it.</TD>
</TR>

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    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (h)&nbsp;The Shareholder hereby consents to and approves the
    actions taken by the Board of Directors of the Company in
    approving the Merger Agreement and this Agreement, the Merger
    and the other transactions contemplated by the Merger Agreement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Grant of Irrevocable Proxy;
Appointment of Attorney-In-Fact.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;Each Shareholder hereby irrevocably grants to, and
appoints, Parent and Lesa Kennedy and Marcus Smith, in their
respective capacities as officers of Parent, and any individual
who shall hereafter succeed to any such office of Parent, and
each of them individually, and any individual designated in
writing by any of them, as such Shareholder&#146;s proxy and
attorney-in-fact (with full power of substitution), during and
for the Proxy Term (hereinafter defined), for and in the name,
place and stead of such Shareholder, to vote such
Shareholder&#146;s Subject Shares, or grant a consent or
approval in respect of such Subject Shares, (i)&nbsp;in favor of
adoption of the Merger Agreement and approval of the Merger and
any other transactions contemplated by the Merger Agreement,
(ii)&nbsp;against any Takeover Proposal and (iii)&nbsp;against
any amendment of the Company&#146;s First Amended and Restated
Articles of Incorporation or Bylaws, or other proposal or
transaction (including any consent solicitation to remove or
elect any directors of the Company) involving the Company, which
amendment or other proposal or transaction would in any manner
impede, frustrate, prevent or nullify, or result in a breach of
any covenant, representation or warranty or any other obligation
or agreement of the Company under or with respect to, the
Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement or change in any manner the
voting rights of the Company Common Stock. The Shareholder
understands and acknowledges that Parent is entering into the
Merger Agreement in reliance upon the Shareholder&#146;s
execution and delivery of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;Such Shareholder represents that any proxies heretofore
given in respect of such Shareholder&#146;s Subject Shares are
not irrevocable, and that all such proxies are hereby or
heretofore have been revoked.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;Such Shareholder hereby affirms that the irrevocable
proxy set forth in this Section&nbsp;4 is given in connection
with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the
duties of the Shareholder under this Agreement. Such Shareholder
hereby further affirms that the irrevocable proxy is coupled
with an interest and may under no circumstances be revoked. Such
Shareholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be
irrevocable in accordance with the provisions of
Section&nbsp;10-722 of the Arizona Code. The irrevocable proxy
granted hereunder shall automatically terminate upon the
termination of this Agreement in accordance with Section&nbsp;7.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;For purposes of this Agreement, &#147;Proxy Term&#148;
means the period from the execution of this Agreement until the
termination of this Agreement in accordance with the terms of
Section&nbsp;7 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Further Assurances.</I> Each
Shareholder will, from time to time, execute and deliver, or
cause to be executed and delivered, such additional or further
consents, documents and other instruments as Parent may
reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Additional Matters.</I>
(a)&nbsp;Each Shareholder agrees that this Agreement and the
obligations hereunder shall attach to such Shareholder&#146;s
Subject Shares and shall be binding upon any person or entity to
which legal or beneficial ownership of such Subject Shares shall
pass, whether by operation of law or otherwise, including such
Shareholder&#146;s heirs, guardians, administrators or
successors, and that each certificate
</DIV>

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<DIV align="left" style="font-size: 10pt;">
representing such Subject Shares will be inscribed with a legend
to such effect. In the event of any stock split, stock dividend,
merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company Common
Stock, or the acquisition of additional shares of Company Common
Stock or other voting securities of the Company by any
Shareholder, the number of Subject Shares listed in
Schedule&nbsp;A beside the name of such Shareholder shall be
adjusted appropriately and this Agreement and the obligations
hereunder shall attach to any additional shares of Company
Common Stock or other voting securities of the Company issued to
or acquired by such Shareholder. Notwithstanding any provision
in this Agreement to the contrary, nothing herein shall require
or be deemed to require the exercise of, or give any person
other than the Shareholder the power to exercise, any option to
purchase Company Common Stock or any Warrants held at any time
by such Shareholder, it being understood that the foregoing
shall in no way limit the provisions of Section&nbsp;3 herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;Each Shareholder agrees that such Shareholder will
tender to the Company, within 10 business days after the date
hereof (or, in the event Subject Shares are acquired subsequent
to the date hereof within 10&nbsp;business days after the date
of such acquisition), any and all certificates representing such
Shareholder&#146;s Subject Shares in order that the Company may
inscribe upon such certificates the legend in accordance with
Section&nbsp;5.12 of the Merger Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;No person executing this Agreement who is or becomes
during the term hereof a director or officer of the Company
makes (or shall be deemed to have made) any agreement or
understanding herein in his or her capacity as such a director
or officer of the Company. Each Shareholder signs solely in his,
her or its capacity as the record holder and beneficial owner
of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Shareholder&#146;s Subject Shares and
nothing herein shall limit or affect any actions taken by any
Shareholder or any employee or Affiliate of any Shareholder in
his or her capacity as an officer or director of Company to the
extent specifically permitted by the Merger Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;The parties hereto agree that the legend referenced
above shall be removed and the restrictions set forth in the
legend above shall be of no further force and effect, in each
case, upon termination of this Agreement in accordance with
Section&nbsp;7 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination.</I> This
Agreement shall terminate, and the provisions hereof shall be of
no further force or effect, upon the earliest to occur of
(i)&nbsp;the Effective Time or (ii)&nbsp;the termination of the
Merger Agreement. Nothing in this Section&nbsp;7 shall relieve
or otherwise limit the liability of any party for breach of this
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>General Provisions.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;<I>Amendments.</I> This Agreement may not be amended
except by an instrument in writing signed by each of the parties
hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;<I>Notice.</I> All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally or sent by overnight courier (providing
proof of delivery) to Parent in accordance with
Section&nbsp;8.02 of the Merger Agreement and to the
Shareholders at their respective addresses set forth on
Schedule&nbsp;A attached hereto (or at such other address for a
party as shall be specified by like notice).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;<I>Interpretation.</I> When a reference is made in this
Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of
this Agreement. Wherever the words &#147;include&#148;,
&#147;includes&#148; or &#147;including&#148; are used in this
Agreement, they shall be deemed to be followed by the words
&#147;without limitation&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;<I>Counterparts.</I> This Agreement may be executed in
one or more counterparts (including by facsimile), all of which
shall be considered one and the same agreement. This Agreement
shall become effective against Parent when one or more
counterparts have been signed by Parent and delivered to each
Shareholder. This Agreement shall become effective against any
Shareholder when one or more counterparts have been executed by
such Shareholder and delivered to Parent. Each party need not
sign the same counterpart.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;<I>Entire Agreement; No Third-Party Beneficiaries.</I>
This Agreement (including the documents and instruments referred
to herein) (i)&nbsp;constitutes the entire agreement and
supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter
hereof and (ii)&nbsp;is not intended to confer upon any person
other than the parties hereto any legal or equitable rights or
remedies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;<I>Governing Law; Capitalized Terms.</I> THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF ARIZONA, REGARDLESS OF THE LAWS THAT MIGHT
OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL
HAVE THE MEANINGS SET FORTH IN THE MERGER AGREEMENT.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;<I>Voidability.</I> If prior to the execution hereof,
the Board of Directors of the Company shall not have duly and
validly authorized and approved by all necessary corporate
action, this Agreement, the Merger Agreement and the
transactions contemplated hereby and thereby, so that by the
execution and delivery hereof Parent or Sub would become, or
could reasonably be expected to become an &#147;interested
shareholder&#148; with whom the Company would be prevented for
any period pursuant to Sections&nbsp;10-2741 et seq. of the
Arizona Code from engaging in any &#147;business
combination&#148; (as such terms are defined in
Section&nbsp;ARS&nbsp;10-2701 of the Arizona Code), then this
Agreement shall be void and unenforceable until such time as
such authorization and approval shall have been duly and validly
obtained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Specific Enforcement.</I> The
parties agree that irreparable damage would occur and that the
parties would not have any adequate remedy at law in the event
that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and
provisions of this Agreement in any Federal court located in the
State of Delaware or in any state court in the State of
Delaware, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the
parties hereto (i)&nbsp;consents to submit itself to the
personal jurisdiction of any Federal court located in the State
of Delaware or of any state court located in the State of
Delaware in the event any dispute arises out of this Agreement
or the transactions contemplated by this Agreement,
(ii)&nbsp;agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from
any such court and (iii)&nbsp;agrees that it will not bring any
action relating to this Agreement or the transactions
contemplated by this Agreement in any court other than a Federal
court located in the State of Delaware or a state court located
in the State of Delaware.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Assignment.</I> Neither this
Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, by operation of law or otherwise,
by any Shareholder, on the one hand, without the prior written
consent of Parent nor by Parent, on the other hand, without the
prior written consent of the Shareholders, and any assignment
without such consent shall be null and void, except that Parent
may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any direct or indirect
wholly owned Subsidiary of Parent. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their
respective successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Severability.</I> If any
term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy,
all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by Applicable Law in an acceptable
manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No Ownership Interest.</I>
Nothing contained in this Agreement shall be deemed to vest in
Parent any direct or indirect ownership or incidence of
ownership of or with respect to the Subject Shares. All rights,
ownership and economic benefits of and related to the Subject
Shares shall remain vested in and belong to the Shareholders,
and Parent shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the
policies or operations of the Company or exercise any power or
authority to direct the Shareholders in the voting of any of the
Subject Shares, except as otherwise provided herein.
</DIV>

<P align="center" style="font-size: 10pt;">C-6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Service of Process.</I> Each
party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this Agreement.
Nothing in this Agreement will affect the right of a party to
serve process in another manner permitted by law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fiduciary Duties.</I>
Notwithstanding anything to the contrary in this Agreement, in
the case of any Shareholder who is a director of the Company,
the agreements of such Shareholder contained in this Agreement
shall not govern, limit or restrict such Shareholder&#146;s
ability to exercise his or her fiduciary duties as a director to
the shareholders of the Company under applicable law in his or
her capacity as a director of Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IN WITNESS WHEREOF, Parent has caused this Agreement to be
signed by its officer thereunto duly authorized and each
Shareholder has signed this Agreement, all as of the date first
written above.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    SMISC, LLC</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Marcus G. Smith</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Marcus G. Smith</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="7%"></TD>
    <TD width="53%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD align="left">
    Vice President</TD>
</TR>

</TABLE>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    SHAREHOLDER</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Fred Wagenhals</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Fred Wagenhals</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
[Signature Page to Shareholder Agreement]
</DIV>

<P align="center" style="font-size: 10pt;">C-7

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SCHEDULE A</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Shares</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fred Wagenhals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Fred Wagenhals has sole voting and disposition power over
    906,800&nbsp;shares of the Company and 284,195 options of the
    company. In addition, Mr.&nbsp;Wagenhals has the right to vote
    up to 906,800&nbsp;shares owned by Lisa Wagenhals (to the extent
    still owned by Lisa Wagenhals) and stock issued upon the
    exercise of up to 284,195 options of the company (to the extent
    still owned by Ms.&nbsp;Wagenhals)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">C-8
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 9pt;">
<B>ACTION PERFORMANCE COMPANIES, INC.</B>
</DIV>

<DIV align="center" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>2005 SPECIAL MEETING OF SHAREHOLDERS</B>
</DIV>

<DIV align="center" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
The undersigned shareholder of ACTION PERFORMANCE COMPANIES,
INC., an Arizona corporation (the &#147;Company&#148;), hereby
acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement of the Company, each
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, and hereby appoints Herbert M. Baum and David M.
Riddiford, and each of them, proxies and attorneys-in-fact, with
full power to each of substitution, on behalf and in the name of
the undersigned, to represent the undersigned at the Special
Meeting of Shareholders of ACTION PERFORMANCE COMPANIES, INC.,
to be held on
Friday, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005 at 8:00&nbsp;a.m. local time, at Action Performance&#146;s
corporate headquarters located at 1480&nbsp;S.&nbsp;Hohokam
Drive, Tempe, AZ, and at any adjournment or adjournments or
postponement or postponements thereof, and to vote all shares of
common stock that the undersigned would be entitled to vote if
then and there personally present on the matters set forth on
the reverse side of this proxy card.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Please date, sign and mail your proxy card in the envelope
provided as soon as possible.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Please detach along perforated line and mail in the envelope
provided.</B>
</DIV>

<DIV align="right" style="font-size: 9pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
(Continued and to be signed on the reverse side)
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 7pt;">
<B>SPECIAL MEETING OF SHAREHOLDERS OF ACTION PERFORMANCE
COMPANIES, INC.</B>
</DIV>

<DIV align="right" style="font-size: 7pt;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005</B>
</DIV>

<DIV align="left" style="font-size: 7pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>FOR EACH OF THE MATTERS SET FORTH BELOW, THE BOARD OF
DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; THE MATTER
SUBMITTED. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE&nbsp;</B><FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV style="margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 7pt;">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><B>1.&nbsp;</B></TD>
    <TD align="left">
    <B>TO APPROVE THE AGREEMENT AND PLAN OF MERGER, DATED AS OF
    AUGUST&nbsp;29, 2005, BY AND AMONG INTERNATIONAL SPEEDWAY
    CORPORATION, SPEEDWAY MOTORSPORTS, INC., SMISC, LLC, MOTORSPORTS
    AUTHENTICS, INC. AND ACTION PERFORMANCE</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 7pt;">

<TR>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B><FONT face="wingdings">&#111;</FONT>&nbsp;FOR</B></TD>
    <TD align="center"><B><FONT face="wingdings">&#111;</FONT>&nbsp;AGAINST</B></TD>
    <TD align="center"><B><FONT face="wingdings">&#111;</FONT>&nbsp;ABSTAIN</B></TD>
    <TD align="right"></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 7pt; margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
and upon such matters as may properly come before the meeting or
any adjournment or adjournments or postponement or postponements
thereof.
</DIV>

<DIV align="left" style="font-size: 7pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
DIRECTION IS INDICATED, WILL BE VOTED IN FAVOR OF THE AGREEMENT
AND PLAN OF MERGER, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING.</B>
</DIV>

<DIV align="left" style="font-size: 7pt; margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;
A majority of such attorneys-in-fact or substitutes as shall be
present and shall act at said meeting or any adjournment or
adjournments or postponement or postponements thereof (or if
only one shall be present and act, then that one) shall have and
may exercise all of the powers of said attorneys-in-fact
hereunder.
</DIV>

<DIV style="margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 7pt;">

<TR>
    <TD width="52%"></TD>
    <TD width="48%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    To change the address on your account, please check the box at
    right and indicate your new address in the address space above.
    Please note that changes to the registered name(s) on the
    account may not be submitted via this method.</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 7pt; ">

<TR style="font-size: 1pt;">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="59%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Signature of
    Shareholder&nbsp;<DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Date:&nbsp;<DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Signature of
    Shareholder&nbsp;<DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Date:&nbsp;<DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    NOTE: Please sign exactly as your name or names appear on this
    Proxy. When shares are held jointly, each holder should sign.
    When signing as executor, administrator, attorney, trustee or
    guardian, please give full title as such. If the signer is a
    corporation, please sign full corporate name by duly authorized
    officer, giving full title as such. If signer is a partnership,
    please sign in partnership name by authorized person.</TD>
</TR>

</TABLE>
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end
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</SUBMISSION>
