ACTION PERFORMANCE COMPANIES, INC.


                    ________________________________________




                                 FIRST AMENDMENT

                           Dated as of MARCH 18, 1998

                                       to

                             NOTE PURCHASE AGREEMENT

                           Dated as of JANUARY 2, 1997



                    ________________________________________

                       Re: $20,000,000 8.05% Senior Notes
                               Due January 2, 1999
<PAGE>
                   FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS


         This First  Amendment  dated as of March 18,  1998 (the or this  "First
Amendment") to the Note  Agreements  each dated as of January 2, 1997 is between
Action Performance Companies,  Inc., an Arizona Corporation (the "Company"), and
each  of  the  institutions  which  is  a  signature  to  this  First  Amendment
(collectively, the "Noteholders").

                                    RECITALS:

         A. The Company and each of the Noteholders have heretofore entered into
separate  and  several  Note  Agreements  each  dated  as  of  January  2,  1997
(collectively,  the "Note  Agreements").  The Company has heretofore  issued the
$20,000,000  8.05% Senior Notes Due January 2, 1999 (the "Notes")  dated January
2, 1997,  pursuant to the Note  Agreements.  The  Noteholders are the holders of
100% of the outstanding principal amount of the Notes.

         B. The  Company  and the  Noteholders  now  desire  to  amend  the Note
Agreements in the respects, but only in the respects hereinafter set forth.

         C.  Capitalized  terms used herein shall have the  respective  meanings
ascribed  thereto in the Note  Agreements  unless herein  defined or the context
shall otherwise require.

         D. All  requirements of law have been fully complied with and all other
acts and  things  necessary  to make this  First  Amendment  a valid,  legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.

         Now,  therefore,  upon  the  full  and  complete  satisfaction  of  the
conditions  precedent to the  effectiveness of this First Amendment set forth in
ss.3.1 hereof,  and in  consideration  of good and valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the Company and the
Noteholders do hereby agree as follows:

SECTION 1.  AMENDMENTS.

         1.1 Section 10.1 of the Note Agreements  shall be and is hereby amended
in its entirety to read as follows:

                  MAINTENANCE OF CONSOLIDATED SENIOR FUNDED
                  DEBT AND CONSOLIDATED FUNDED DEBT TO
                  CONSOLIDATED EBITDA.

                  The company will not permit, at any time:

                  (a)      the  ratio  of  Consolidated  Senior  Funded  Debt to
                           Consolidated EBITDA to be greater than 2.00 to 1.00;
<PAGE>
                  (b)      the ratio of Consolidated Funded Debt to Consolidated
                           EBITDA to be greater than 4.00 to 1.00.

         1.2 Section 10.2 of the Note Agreements  shall be and is hereby amended
by substituting  the phrase "3.00 to 1.00" for the phrase "5.00 to 1.00" as such
phrase appears in said Section 10.2.

         1.3 The following  shall be added as a new  definition in  alphabetical
order to Schedule II of the Note Agreements:

         "Senior Funded Debt" means all Funded Debt which is not expressed to be
         subordinated in right of payment of any other Funded Debt.

SECTION 2.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         2.1 To induce  the  Noteholders  to  execute  and  deliver  this  First
Amendment  (which  representations  shall  survive the execution and delivery of
this First  Amendment),  the Company  represents and warrants to the Noteholders
that:

         (a)  this  First  Amendment  has been  duly  authorized,  executed  and
delivered  by it and this  First  Amendment  constitutes  the  legal,  valid and
binding obligation, contract and agreement of the Company enforceable against it
in  accordance  with  its  terms,  except  as  enforcement  may  be  limited  by
bankruptcy, insolvency, reorganization,  moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally;

         (b) the Note Agreements, as amended by this First Amendment, constitute
the legal,  valid and  binding  obligations,  contracts  and  agreements  of the
Company enforceable against it in accordance with their respective terms, except
as  enforcement  may  be  limited  by  bankruptcy,  insolvency,  reorganization,
moratorium  or similar  laws or  equitable  principles  relating  to or limiting
creditors' rights generally;

         (c) the  execution,  delivery  and  performance  by the Company of this
First Amendment (i) has been duly authorized by all requisite  corporate  action
and,  if  required,  shareholder  action  (ii) does not  require  the consent or
approval of any  governmental or regulatory  body or agency,  and (iii) will not
(A)  violate  (1) any  provision  of law,  statute,  rule or  regulation  or its
certificate of incorporation or bylaws,  (2) any order of any court or any rule,
regulation  or order of any other agency or  government  binding upon it, or (3)
any provisions of any material indenture, agreement or other instrument to which
it is a  party  or by  which  its  properties  or  assets  are or may be  bound,
including,  without limitation, the Bank Documents, or (B) result in a breach or
constitute  (alone or with due notice or lapse of time or both) a default  under
any indenture,  agreement or other instrument  referred to in clause (iii)(A)(3)
of this ss.2.1(c);

         (d) as of the  date  hereof  and  after  giving  effect  to this  First
Amendment, no default or Event of Default has occurred which is continuing; and
<PAGE>
         (e) except as disclosed in the  Company's  Form 10-K for the year ended
September  30, 1997 and the Form 10-Q for the quarter  ended  December 31, 1997,
copies of which have been provided to the Noteholders, or except as set forth in
updated Schedules attached to this First Amendment,  all the representations and
warranties  contained  in  Article 5 of the Note  Agreements  and the  Schedules
thereto are true and correct in all  material  respects  with the same force and
effect as if made by the Company on and as of the date hereof.

SECTION 3.  CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.

         3.1 This First Amendment shall not become  effective  until,  and shall
become effective when, each and every one of the following conditions shall have
been satisfied:

         (a) executed counterparts of this First Amendment, duly executed by the
Company and the holders of 100% of the outstanding principal of the Notes, shall
have been delivered to the Noteholders;

         (b) the Noteholders shall have received a written consent to this First
Amendment duly executed by the Subsidiary Guarantors,  which consent shall be in
the form and substance  satisfactory  to the Noteholders and which shall confirm
the continued effectiveness of each Subsidiary Guaranty;

         (c) the Noteholders shall have received  evidence  satisfactory to them
that the Bank Documents have been amended in a manner  substantially  consistent
with the terms hereof;

         (d) the  Noteholders  shall have received (i) a copy of the resolutions
of the Board of Directors of the Company authorizing the execution, delivery and
performance by the Company of this First  Amendment,  certified by its Secretary
or an Assistant  Secretary,  and (ii) a copy of the  resolutions of the Board of
Directors of the Company authorizing execution,  delivery and performance by the
Company of the amendment to the Bank Documents  certified by its Secretary or an
Assistant  Secretary,  which  resolution  shall  be  satisfactory  in  form  and
substance to the Noteholders;

         (e) the representations and warranties of the Company set forth in ss.2
hereof are true and correct on and with respect to the date hereof.

         Upon receipt of all the foregoing,  this First  Amendment  shall become
effective.

SECTION 4.  PAYMENT OF NOTEHOLDERS' COUNSEL FEES AND EXPENSES.

         4.1 The Company  agrees to pay upon  demand,  the  reasonable  fees and
expenses  of Orrick  Herrington  &  Sutcliffe,  counsel to the  Noteholders,  in
connection with the negotiation,  preparation,  approval, execution and delivery
of this First Amendment in the event the Noteholders deem it necessary to retain
such counsel  prior to this First  Amendment  becoming  effective as provided in
Section 3.
<PAGE>
SECTION 5.  MISCELLANEOUS.

         5.1 This First  Amendment  shall be construed in connection with and as
part of each of the Note  Agreements,  and  except  as  modified  and  expressly
amended by this First Amendment,  all terms,  conditions and covenants contained
in the Note Agreements and the Notes are hereby ratified and shall be and remain
in full force and effect.

         5.2 Any and all notices,  requests,  certificates and other instruments
executed and delivered  after the execution and delivery of this First Amendment
may refer to the Note Agreements without making specific reference to this First
Amendment  but  nevertheless  all  such  references  shall  include  this  First
Amendment unless the context otherwise requires.

         5.3 The descriptive  headings of the various  Sections or parts of this
First  Amendment  are for  convenience  only and shall not affect the meaning or
construction of any of the provisions hereof.

         5.4  This  First  Amendment  shall  be  governed  by and  construed  in
accordance with New York law.

         5.5 The execution  hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this First Amendment may be
executed in any number of counterpart constituting an original, but all together
only one agreement.

                                    ACTION PERFORMANCE COMPANIES, INC.

                                    By: /s/ Tod Wagenhals
                                        Its: Executive V.P.
 
Accepted and Agreed to:

JEFFERSON-PILOT LIFE INSURANCE COMPANY

By: /s/ Richard Kapanka
    Its:

ALEXANDER HAMILTON LIFE INSURANCE
         COMPANY OF AMERICA

By: /s/ Richard Kapanka
    Its:

FIRST ALEXANDER HAMILTON LIFE
         INSURANCE COMPANY

By: /s/ Richard Kapanka
    Its:
<PAGE>
                                     CONSENT


WHEREAS, Action Performance Companies,  Inc. (the "Company") entered into a Note
Purchase  Agreement Dated as of January 2, 1997 (the "Note Purchase  Agreement")
with certain purchasers (the "Noteholders") listed on Schedule I thereto, and

WHEREAS,  the Company is seeking to amend the Note Purchase Agreement as set out
in that  certain  First  Amendment  Dated  as of  March  18,  1998  (the  "First
Amendment"), and

WHEREAS, the Noteholders,  as a condition to execution and delivery of the First
Amendment,  require  that  the  Subsidiary  Guarantors  consent  to  such  First
Amendment and confirm the continued existence,  effectiveness and enforceability
of the Subsidiary Guaranties,

NOW THEREFORE,  the undersigned,  being all of the Subsidiary  Guarantors,  have
executed this Consent for the purposes set forth herein.

1. All capitalized  terms not otherwise defined shall have the meaning set forth
in the Note Purchase Agreement.

2. Each Subsidiary Guarantor does hereby consent to the First Amendment dated as
of March 18, 1998 to the Note Purchase Agreement.

3.  Each  Subsidiary   Guarantor   hereby  confirms  the  continued   existence,
effectiveness and enforceability of its respective Subsidiary Guaranty, executed
in connection with and pursuant to the Note Purchase Agreement.

4. Each Subsidiary  Guarantor  acknowledges  that the effectiveness of the First
Amendment  will  benefit each such  Guarantor by making funds  available to such
Guarantor  through the Company and by enhancing  the  financial  strength of the
consolidated group of which each Guarantor and the Company are members.

5. Each Subsidiary  Guarantor  acknowledges  that the Noteholders are relying on
the  continued  enforceability  of each  Subsidiary  Guaranty in  executing  and
delivering the First Amendment.


SPORTS IMAGE, INC.                                   MTL ACQUISITION, INC.



By: /s/ Christopher Besing                           By: /s/ Christopher Besing
    Its                                                  Its
<PAGE>
CREATIVE MARKETING &                                 AW ACQUISITION CORP.
    PROMOTIONS, INC.


By: /s/ Christopher Besing                           By: /s/ Christopher Besing
    Its                                                  Its


RYP, INC.                                            IW ACQUISITION CORP.


By: /s/ Christopher Besing                           By: /s/ Christopher Besing
    Its                                                  Its