Document:

30 EAST FOURTH AVENUE * SAN MATEO, CA 94401 * (650) 344-1500
                           SAND HILL PROPERTY COMPANY

July 3, 2000

VIA FAX 650-266-8089

Mr. Dinesh Maniar
President, Montgomery Realty Group, Inc.
400 Oyster Blvd., Suite 415
South San Francisco, CA  94080

Re:      Gull Drive, South San Francisco

Dear Mr. Maniar:

         In accordance with that Purchase and Sale Agreement between  Montgomery
Realty Group,  Inc.,  ("Seller"),  and Peter Pau dba Sand Hill Property  Company
("Buyer") dated May 2, 2000 ("Agreement"), the "Due Diligence Period" defined in
Agreement Section 6 shall expire July 3, 2000.

         Buyer hereby waives the conditions,  and Buyer's right to terminate the
Agreement  prior to the expiration of the Due Diligence  Period on the condition
that Seller  execute the First  Amendment in the form  attached  hereto.  Should
Seller not agree to execute the First  Amendment,  then this letter  constitutes
Buyer's  notice  pursuant  to  Agreement  Section  6 that  the  Property  is not
satisfactory.

         Please  let me  know  how  you  wish  to  proceed.  We are  anxious  to
consummate  this  transaction.  If you have any questions or comments  regarding
this letter or the proposed First Amendment, please do not hesitate to call.

                                   Sincerely,

                                   /s/ Peter Pau
                                   Peter Pau

<PAGE>

                 First Amendment to Purchase and Sale Agreement

         This First Amendment  ("Amendment")  is executed as of July __, 2000 by
and between  Montgomery Realty Group,  Inc., a Nevada corporation doing business
in California as  Nevada-Montgomery  Realty Group, Inc. ("Seller") and Peter Pau
dba Sand  Hill  Property  Company  ("Buyer"),  and is made with  respect  to the
Agreement  dated  as of May 2,  2000  by  and  between  Seller  and  Buyer.  All
capitalized  terms not otherwise defined herein shall have the meaning specified
in  the  Agreement.  For  good  and  valuable  consideration,  the  receipt  and
sufficiency of which is hereby acknowledged, Buyer and Seller amend the Original
Agreement as follows:

1. Buyer waives the conditions specified in Original Agreement Section 6.

2. Buyer exercises the Fixed Price Option in Original  Agreement  Section 3 (c).
However, the increased deposit of Five Hundred Thousand Dollars ($500,000) shall
not be due until three (3) business days after the  recordation  of a quit claim
from Sanrio relinquishing its entire right in the truck loading access easements
located on the Land.  Furthermore,  the increased deposit may be posted by Buyer
in form of a letter of credit or a bond.

3. The  Seller's  right to  accelerate  Closing  pursuant  to  Section 8 (a) and
Section 8 (b) of the Original Agreement is deleted,  and the Closing shall occur
one  hundred  twenty  (120)  days from the date of this  Amendment,  subject  to
Seller's right to extend in Section 8 (c) of the Original Agreement.

4. Except as amended hereby,  the Original  Contract shall remain unmodified and
in full force and effect.

In Witness Whereof, Buyer and Seller have executed this Amendment as of the
above date.

                                    Seller

                                    Montgomery Realty Group, Inc.,
                                    a Nevada corporation

                                    By: /s/ Dinesh Maniar
                                        ---------------------------
                                        Dinesh Maniar, President

                                    Buyer

                                    By: /s/ Peter Pau
                                        ---------------------------
                                        Peter PauSECOND AMENDMENT TO CREDIT AGREEMENT

          THIS  SECOND  AMENDMENT  TO  CREDIT AGREEMENT (the "Second Amendment")
dated as of May 15, 2000, is to that Credit Agreement dated as of April 13, 1999
(as  amended  and modified from time to time, the "Credit Agreement"; terms used
but  not otherwise defined herein shall have the meanings provided in the Credit
Agreement),  by  and  among  RACING  CHAMPIONS,  INC.,  an  Illinois corporation
("RCI"), and RACING CHAMPIONS SOUTH, INC., a North Carolina corporation ("RCS"),
(each  of  RCI  and  RCS individually a "U.S. Borrower", collectively, the "U.S.
Borrowers"),  RACING  CHAMPIONS WORLDWIDE LIMITED, a corporation organized under
the  laws  of  the  United  Kingdom (the "U.K. Borrower"; together with the U.S.
Borrowers,  the  "Borrowers"),  the  Guarantors  identified therein, the several
banks  and  other  financial institutions identified therein (the "Lenders") and
FIRST  UNION  NATIONAL  BANK,  a national banking association, as administrative
agent for the Lenders thereunder (in such capacity, the "Administrative Agent").

                              W I T N E S S E T H:
                              - - - - - - - - - -

          WHEREAS,  the  Lenders  have established a $175,000,000 secured credit
facility  for  the  benefit of the Borrowers pursuant to the terms of the Credit
Agreement;

          WHEREAS,  the  Borrowers  have  requested  the  waiver of the Lenders'
rights  and  remedies  with  respect  to  certain  Events  of Default which have
occurred  and  are  continuing;

          WHEREAS,  the Borrowers and Lenders wish to amend the Credit Agreement
to  modify  certain  provisions  contained  therein;

          WHEREAS, the Lenders have agreed to the requested waiver and amendment
of  the  Credit  Agreement  on  the  terms and conditions hereinafter set forth;

          NOW,  THEREFORE,  IN  CONSIDERATION of the premises and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  the  parties  hereto  agree  as  follows:

     A.     The  Credit  Agreement  is  amended  in  the  following  respects:

          1.     Section  2.1(a)  is  hereby  amended  by  (i) deleting the text
"SIXTY  MILLION  DOLLARS ($60,000,000)" therein in its entirety and substituting
therefor  "THIRTY-FIVE  MILLION  ($35,000,000)"  and  (ii)  adding the following
provision at the end thereof:   "Notwithstanding anything in the foregoing or to
the  contrary,  during  the  period  May 15, 2000 through and including July 17,
2000,  with  regard to the Lenders collectively, the sum of the aggregate amount
of U.S. Revolving Loans made, plus the Dollar Equivalent of U.K. Revolving Loans
made,  plus Swingline Loans made, plus LOC Obligations incurred shall not exceed
$16,000,000."

<PAGE>
          2.     Section  2.10  is  hereby  amended  by  adding  the  following
provision  at  the  end  thereof:  "Notwithstanding anything to the contrary set
forth  in Section 2.1(d), 2.2(c), 2.4(d), the Notes or this Section 2.10, during
the period commencing on April 1, 2000 and ending on July 17, 2000, (i) interest
on the outstanding balance of all Obligations shall accrue and be payable at the
per  annum  rate  equal  to  the  LIBOR Rate plus two and three-quarters percent
(2.75%)  and  no Interest Period other than those in effect on May 15, 2000, may
consist  of a period longer than one month in duration, and (ii) a waiver fee in
the  form  of  additional interest on the outstanding balance of all Obligations
shall  accrue  and  be  payable  at  the per annum rate equal to one half of one
percent  (0.50%)."

          3.     Article  V  is hereby amended by adding the following provision
as  Section  5.17:

          SECTION 5.17 DEPOSITORY ACCOUNTS. The  U.S. Borrowers shall, and shall
          cause  the  Guarantors to, maintain all of their deposit accounts into
          which, cash, Cash Equivalents, collections of  all accounts receivable
          of the U.S. Borrowers and Guarantors, and other proceeds of Collateral
          are deposited at The Northern Trust Company or other Lender acceptable
          to  the  Administrative  Agent  from  and  after  May  18,  2000.

          4.     Section  7.1(k) is hereby amended by deleting "." at the end of
such  section  and  inserting  ";  or"  in  place  of  such  period.

          5.     Section  7.1  is  hereby  amended  by  adding  the following as
Section  7.1(l):

                (l)     Any of the U.S. Borrowers or the Guarantors shall fail
          to  perform,  comply  or  observe  Section  5.17  hereof.

     A.     Except  as  modified  hereby, all of the terms and provisions of the
Credit  Documents  remain  in  full  force  and  effect.

     B.     The  Lenders hereby waive and agree, during the period commencing on
May  15,  2000 through and including July 17, 2000, not to exercise their rights
and remedies arising with respect to the occurrence of those Defaults and Events
of  Default  identified  on  SCHEDULE  I attached hereto and made a part hereof.
Notwithstanding  the preceding sentence, the imposition under Section 6.11(d) of
a  bar against any repurchase by the Company of shares of its Capital Stock upon
the  occurrence  of a Default or Event of Default shall continue as if no waiver
had  occurred,  and  no such repurchases shall be permitted.  The Lenders hereby
reserve all of their rights and remedies under the terms of the Credit Agreement
and  Credit  Documents  arising  from  the  occurrence  of a Default or Event of
Default  and  may exercise any or all of the same at any time (i) after the date
of  this  Second  Amendment  in  the  event  any Default or Event of Default not
identified  on  SCHEDULE  I  shall  occur  or  come  to  the  knowledge  of  the
Administrative  Agent  and/or  any  Lender and (ii) from and after July 18, 2000
with  respect  to  any  Default or Event of Default whether or not identified on
SCHEDULE  I.

                                        2
<PAGE>
     C.     The  Credit  Parties  hereby  represent  and  warrant  that  (a) the
representations and warranties contained in Article III of the Credit Agreement,
as  amended  hereby  are  correct in all material respects on and as of the date
hereof  as  though  made  on  and as of such date and after giving effect to the
amendments  contained  herein  and  (b)  except  as  specifically  identified on
SCHEDULE  I, no Default or Event of Default exists under the Credit Agreement on
and  as  of  the date hereof and after giving effect to the amendments contained
herein.

     D.     The Second Amendment shall become effective upon the satisfaction of
the  following  conditions  precedent:

          1.     Execution  of Second Amendment.  The Administrative Agent shall
have  received  counterparts  of  this  Second  Amendment,  executed  by  a duly
authorized  offer  of  each  party  thereto.

          2.     Legal  Opinion of Counsel.  The Administrative Agent shall have
received an opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C.,
counsel for the Credit Parties, dated as of the date hereof and addressed to the
Administrative  Agent and the Lenders, in form and substance satisfactory to the
Administrative  Agent.

          3.     Transfer  of  Deposits.  The Company shall have caused the U.S.
Borrowers and Guarantors to direct the withdrawal by no later than May 18, 2000,
of  all  amounts  on  deposit  with financial institutions, brokerage houses, or
other  Persons on the date of this Second Amendment and transfer the same to the
accounts  referenced  at  A.3.  above.

     A.     Each  of  the  Credit  Parties  hereby acknowledges the right of the
Administrative  Agent  and  each  of  the  Lenders  to,  and  agrees  that  the
Administrative  Agent  and  each  of  the  Lenders  and/or  their  authorized
representatives  (including,  without  limitation,  any  independent consultants
engaged  by  the  Administrative Agent) may, visit and inspect any of the Credit
Parties'  premises,  books  and records, receipts, correspondence and other data
relating  to their respective businesses and/or the transactions evidenced by or
contemplated  in  the  Credit  Documents and the Collateral and to discuss their
affairs,  finances, and accounts with their management personnel and independent
certified  public accountants, which visit, inspection, and discussions shall be
at  the  Company's  expense.

     B.     Each  of  the Credit Parties hereby reaffirms all of its obligations
and  duties  under  the Credit Documents as amended including but not limited to
the  Borrowers'  obligations  under  the  Credit  Agreement  and  the Guarantors
obligations  under  the  Credit  Agreement.

     C.     The  Company  agrees  to  pay  all  reasonable costs and expenses in
connection  with  the  preparation,  execution  and  delivery  of  this  Second
Amendment,  including  the  reasonable  fees  and expenses of the Administrative
Agent's  legal  counsel,  Sidley  &  Austin.

     D.     The  Second Amendment may be executed in any number of counterparts,
each  of which when so executed and delivered shall be deemed an original and it
shall  not  be  necessary in making proof of this Second Amendment to produce or
account  for  more  than  one  such  counterpart.

                                        3
<PAGE>
     E.     This  Second  Amendment and the Credit Agreement, as amended hereby,
shall  be  deemed  to  be  contracts  made  under, and for all purposes shall be
construed  in  accordance  with  the  laws  of  the  State  of  North  Carolina.

          IN  WITNESS  WHEREOF,  each  of  the  parties  hereto  has  caused  a
counterpart  of this First Amendment to be duly executed and delivered as of the
date  and  year  first  above  written.

U.S.  BORROWERS:                         RACING  CHAMPIONS,  INC.,
---------------                             an  Illinois  corporation

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        RACING  CHAMPIONS  SOUTH,  INC.,
                                          a  North  Carolina  corporation

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

U.K.  BORROWER:                         RACING  CHAMPIONS  WORLDWIDE
--------------                          LIMITED,
                                           a  United  Kingdom  corporation

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        4
<PAGE>
GUARANTORS:                    RACING  CHAMPIONS  CORPORATION,
----------                           a  Delaware  corporation
                               GREEN'S  RACING  SOUVENIRS,  INC.,
                                     a  Virginia  corporation
                               RCNA  HOLDINGS,  INC.,
                                     a  Delaware  corporation
                               RACING  CHAMPIONS  ERTL,  INC.,  F/K/A
                               THE  ERTL  COMPANY,  INC.,
                                     a  Delaware  corporation
                               DIECAST  EXPRESS.COM,  INC.,
                                     a  Delaware  corporation

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        5
<PAGE>
ADMINISTRATIVE  AGENT
---------------------
AND  LENDERS:                            FIRST  UNION  NATIONAL  BANK,
------------                              as  Administrative  Agent  and  as  a
                                          Lender

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        6
<PAGE>
                                          HARRIS  TRUST  AND  SAVINGS  BANK

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        7
<PAGE>
                                                   BANKONE,  NA, F/K/A THE FIRST
                                                   NATIONAL BANK OF CHICAGO

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        8
<PAGE>
                                          NORTHERN  TRUST  COMPANY

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                        9
<PAGE>
                                          BANK  OF  AMERICA,  N.A.

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                       10
<PAGE>
                                          COMERICA  BANK

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                       11
<PAGE>
                                          NATIONAL  CITY  BANK

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                       12
<PAGE>
                                          MICHIGAN  NATIONAL  BANK

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                       13

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