<PAGE>

                                                                   EXHIBIT 10.42

                              EMPLOYMENT AGREEMENT

This employment agreement (this "AGREEMENT") dated as of February 14, 2003, is
entered into by and between MOTORCAR PARTS & ACCESSORIES, INC., a New York
corporation currently having an address at 2929 California Street, Torrance,
California 90503 (together with its subsidiaries and affiliates, the "COMPANY"),
and Selwyn Joffe, an individual residing at 2687 Cordelia Road, Los Angeles,
California 90049 (the "EXECUTIVE").

                                   WITNESSETH:

WHEREAS, the COMPANY desires to employ EXECUTIVE as its Chairman of the Board,
President and Chief Executive Officer and EXECUTIVE desires to be so employed by
the COMPANY, all upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.       EMPLOYMENT; PRIOR AGREEMENTS. Subject to and upon the terms and
         conditions contained in this AGREEMENT, the COMPANY hereby agrees to
         employ EXECUTIVE and EXECUTIVE agrees to be employed by the COMPANY,
         for the period set forth in Paragraph 2 hereof, to render the services
         to the COMPANY, its affiliates and/or subsidiaries as described in
         Paragraph 3 hereof. Each of the Consulting Agreement dated as of
         December 1, 1999 and the Agreement for Consulting Services dated as of
         May 9, 2002, both between the COMPANY and the EXECUTIVE (the "PRIOR
         AGREEMENTS") shall terminate as of the date hereof (the "COMMENCEMENT
         DATE"); provided, however, that any payments due and payable to the
         EXECUTIVE under the PRIOR AGREEMENTS as of the COMMENCEMENT DATE shall
         be paid as provided therein.

2.       TERM. EXECUTIVE'S term of employment under this AGREEMENT shall
         commence on the COMMENCEMENT DATE and shall continue for a period
         through and including March 31, 2006 (the "EMPLOYMENT TERM"), unless
         extended in writing by both parties or earlier terminated pursuant to
         the terms and conditions set forth herein.

3.       DUTIES.

         (a)      EXECUTIVE shall be employed as the COMPANY'S Chairman of the
                  Board, President and Chief Executive Officer and shall report
                  to the COMPANY'S Board of Directors. It is agreed that
                  EXECUTIVE shall perform his service in the COMPANY'S Torrance,
                  California, facilities, or any other facilities mutually
                  agreeable to the parties.

         (b)      EXECUTIVE agrees to abide by all By-Laws and applicable
                  policies of the Company promulgated from time to time by the
                  Board of Directors of the COMPANY and its constituent
                  committees (together with its appropriate committees, the
                  "BOARD OF DIRECTORS").

                                       1

<PAGE>

4.       EXCLUSIVE SERVICES AND BEST EFFORTS. EXECUTIVE shall devote all of his
         working time, attention, best efforts and ability to the service of the
         COMPANY, its affiliates and subsidiaries during the term of this
         AGREEMENT.

5.       COMPENSATION. As compensation for his services and covenants hereunder,
         the COMPANY shall pay EXECUTIVE the following:

         (a)      Base Salary; Benefits. The COMPANY shall pay EXECUTIVE a base
                  salary ("SALARY") of Five Hundred Thousand Dollars ($500,000)
                  per year. The EXECUTIVE shall receive such additional benefits
                  as are usually provided from time-to-time to senior executives
                  of the COMPANY.

         (b)      Bonus. EXECUTIVE shall participate in the COMPANY'S Executive
                  Bonus Program as adopted and amended from time to time by the
                  COMPANY'S Board of Directors. The COMPANY'S Executive Bonus
                  Program shall be adopted and effective no later than with
                  respect to fiscal periods beginning April 1, 2003.

         (c)      Stock Option. As additional consideration for the services to
                  be performed by EXECUTIVE, the COMPANY granted EXECUTIVE, on
                  March 3, 2003, an option to purchase 100,000 shares of the
                  COMPANY'S common stock, pursuant to the COMPANY'S 1994 Stock
                  Option Plan, at an exercise price of $2.16 per share. Such
                  option shall be immediately exercisable with respect to
                  one-half of such shares and on the first anniversary thereof
                  with respect to the remaining such shares. Upon the
                  termination of this AGREEMENT for any reason, or the
                  expiration of the options for any reason, EXECUTIVE shall
                  have, for a period of 90 days from such termination or
                  expiration, the option, but not the obligation, to sell for
                  cash all or any part of the option, and all or any of the
                  underlying shares if any or all of the options have been
                  exercised, to the COMPANY for (i) with respect to each share
                  remaining subject to the option, the closing price of the
                  COMPANY'S common stock on the trading day immediately
                  preceding termination or expiration (or, if the COMPANY'S
                  stock is not then publicly traded, the fair market value
                  thereof as determined by negotiation between the COMPANY and
                  the EXECUTIVE) minus the exercise price and (ii) with respect
                  to each share purchased pursuant to the option and held by the
                  EXECUTIVE, the closing price of the COMPANY'S common stock on
                  the trading day immediately preceding termination or
                  expiration(or, if the COMPANY'S stock is not then publicly
                  traded, the fair market value thereof as determined by
                  negotiation between the COMPANY and the EXECUTIVE).

         (d)      Certain Transaction Fees. In the event of one or more
                  "PROPOSED TRANSACTIONS" (as defined in Exhibit A hereto)
                  occurring during the term of this AGREEMENT, EXECUTIVE shall
                  receive, as additional compensation with respect to each
                  PROPOSED TRANSACTION, a fee as set forth in Exhibit A hereto
                  (the "TRANSACTION FEES").

6.       BUSINESS EXPENSES. EXECUTIVE shall be reimbursed for, and entitled to
         advances (subject to repayment to the COMPANY if not actually incurred
         by EXECUTIVE) with respect to, only those business expenses incurred by
         him which are reasonable and necessary

                                       2

<PAGE>

         for EXECUTIVE to perform his duties under this AGREEMENT in accordance
         with policies established from time to time by the COMPANY.

7.       EXECUTIVE BENEFITS.

         (a)      EXECUTIVE shall be entitled to four (4) weeks paid vacation
                  each year during the EMPLOYMENT TERM.

         (b)      The COMPANY may withhold from any benefits payable to
                  EXECUTIVE all federal, state, local and other taxes and
                  amounts as shall be required pursuant to law, rule or
                  regulation. All of the benefits to which EXECUTIVE may be
                  entitled which are not specifically described herein may be
                  changed from time to time or withdrawn at any time in the sole
                  discretion of the COMPANY, so long as any such change or
                  withdrawal are applicable to all of the relevant COMPANY
                  executives and to the relevant executives of any company which
                  may control the COMPANY.

         (c)      During the EMPLOYMENT TERM the COMPANY shall provide to
                  executive an automobile allowance in the amount of Fifteen
                  Hundred Dollars ($1500.00) per month, payable monthly. In lieu
                  of such allowance, the Company may, at its option, elect to
                  provide EXECUTIVE an automobile of a make, model and year
                  mutually agreeable to the COMPANY and EXECUTIVE, all costs of
                  which, including fuel, oil, insurance, repairs, maintenance
                  and other expenses, shall be the responsibility of the
                  COMPANY.

         (d)      During the EMPLOYMENT TERM, if EXECUTIVE does not elect
                  medical insurance coverage for himself and his eligible family
                  through the COMPANY, he shall receive as an allowance for such
                  medical insurance an amount equal to the then cost which would
                  be incurred by the COMPANY in supplying such coverage for
                  EXECUTIVE and his eligible family.

8.       DEATH AND DISABILITY.

         (a)      The EMPLOYMENT TERM shall terminate on the date of EXECUTIVE'S
                  death, in which event EXECUTIVE'S accrued SALARY, BONUS and
                  TRANSACTION FEES, if any, reimbursable expenses and benefits,
                  including accrued but unused vacation time, owing to EXECUTIVE
                  through the date of EXECUTIVE'S death, shall be paid to the
                  EXECUTIVE'S estate, and EXECUTIVE'S estate shall assume
                  EXECUTIVE'S rights under the 1994 Stock Option Plan and the
                  related rights under this AGREEMENT. EXECUTIVE'S estate will
                  not be entitled to any other compensation upon termination of
                  this AGREEMENT pursuant to this Paragraph 8 (a)

         (b)      If, during the EMPLOYMENT TERM, in the opinion of a duly
                  licensed physician selected by COMPANY and reasonably
                  acceptable to the EXECUTIVE, EXECUTIVE, because of physical or
                  mental illness or incapacity, shall become substantially
                  unable to perform the duties and services required of him
                  under this AGREEMENT for a period of 180 ) consecutive days ,
                  the COMPANY may, upon at least ten (10) days' prior written
                  notice given at any time after the expiration of

                                       3

<PAGE>

                  such 180 ) day period to EXECUTIVE of its intention to do so,
                  terminate this AGREEMENT as of such date as may be set forth
                  in the notice. In case of such termination, EXECUTIVE shall be
                  entitled to receive his accrued SALARY, BONUS and TRANSACTION
                  FEES, if any, reimbursable expenses and benefits owing to
                  EXECUTIVE through the date of termination. In addition,
                  EXECUTIVE shall be entitled to receive the benefits payable
                  pursuant to the POLICY described in Paragraph 8(c) below.
                  EXECUTIVE will not be entitled to any other compensation upon
                  termination of this AGREEMENT pursuant to this Paragraph 8
                  (b).

         (c)      During the period ending no later than June 30, 2003, the
                  COMPANY and the EXECUTIVE agree to negotiate in good faith to
                  provide EXECUTIVE, at the COMPANY'S expense, with the benefit
                  of an appropriate amount and term and terms of disability
                  insurance. The EXECUTIVE understands and agrees that this
                  Section 8(c) shall not require the COMPANY to agree to any
                  particular disability terms or policy, but to, in the
                  COMPANY'S judgment, negotiate with EXECUTIVE with respect to
                  disability insurance. Any agreement reached by the parties
                  with respect to providing such insurance to EXECUTIVE shall be
                  evidenced by a written amendment to this AGREEMENT signed by
                  the COMPANY and the EXECUTIVE.

9.       TERMINATION.

         (a)      The COMPANY may terminate the employment of EXECUTIVE for
                  Cause (as hereinafter defined); provided, however, that such
                  termination shall only become effective if the COMPANY (acting
                  upon duly adopted resolutions of the Board) shall first give
                  EXECUTIVE written notice of the material breach or default,
                  which notice shall (i) identify in reasonable detail the
                  manner in which the COMPANY believes that EXECUTIVE has
                  breached or defaulted under this AGREEMENT or in the
                  performance of his duties and (ii) indicate the steps required
                  to cure such breach or default, and EXECUTIVE shall fail
                  within 20 business days after receipt of such notice to
                  substantially remedy or correct the same. Upon any such
                  termination, the COMPANY shall be released from any and all
                  further obligations under this AGREEMENT, except that the
                  COMPANY shall be obligated to pay EXECUTIVE his accrued
                  SALARY, BONUS and TRANSACTION FEES, if any, reimbursable
                  expenses and benefits owing to EXECUTIVE through the day on
                  which EXECUTIVE is terminated. EXECUTIVE will not be entitled
                  to any other compensation upon termination of this AGREEMENT
                  pursuant to this Paragraph 9 (a).

         (b)      As used in this AGREEMENT, the term "Cause" shall mean: (i)
                  the willful failure of EXECUTIVE to perform his duties
                  pursuant to Paragraph 3 hereof, which failure is not cured by
                  EXECUTIVE as described in subparagraph (a) above, or (ii) the
                  commission by EXECUTIVE of an act involving moral turpitude,
                  dishonesty, theft or fraudulent business conduct.

         (c)      EXECUTIVE may voluntarily terminate this AGREEMENT for Good
                  Reason. For purposes of this AGREEMENT, "Good Reason" shall
                  mean the occurrence of a Change in Control, as defined below,
                  of the COMPANY. In the event of a

                                       4

<PAGE>

                  Change in Control, EXECUTIVE may voluntarily terminate this
                  AGREEMENT for Good Reason within 90 days of such event by
                  giving written notice thereof to COMPANY.

         (d)      For purposes of this AGREEMENT, a "Change in Control" shall
                  have occurred if:

                  (i)      any "person", as such term is used in Sections 13(d)
                  and 14(d) of the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act") (other than the COMPANY, any trustee or
                  other fiduciary holding securities under an employee benefit
                  plan of the COMPANY, any corporation owned, directly or
                  indirectly, by the stockholders of the COMPANY in
                  substantially the same proportions as their ownership of stock
                  of the COMPANY, Mel Marks, Richard Marks or any affiliate or
                  family relative of either of them, or any trust for the
                  benefit thereof), individually or as a group, is or becomes
                  the "beneficial owner" (as defined in Rule 13d-3 under the
                  Exchange Act), directly or indirectly, of securities of the
                  COMPANY representing 30% or more of the combined voting power
                  of the COMPANY'S then outstanding securities;

                  (ii)     the shareholders of the COMPANY approve a merger or
                  consolidation of the COMPANY with any other corporation, other
                  than (A) a merger or a consolidation which would result in the
                  voting securities of the COMPANY outstanding immediately prior
                  thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity) more than 80% of the combined voting
                  power of the voting securities of the COMPANY or such
                  surviving entity outstanding immediately after such merger or
                  consolidation or (B) a merger or consolidation effected to
                  implement a recapitalization of the COMPANY (or similar
                  transaction) in which no "person" (as hereinabove defined)
                  acquires more than 30% of the combined voting power of the
                  COMPANY's then outstanding securities; or

                  (iii)    the shareholders of the COMPANY approve an agreement
                  for the sale or disposition by the COMPANY of all or
                  substantially all of the COMPANY'S assets.

         (e)      If EXECUTIVE shall voluntarily terminate this AGREEMENT
         pursuant to the provisions of Subparagraph 9(c), then the COMPANY shall
         pay EXECUTIVE'S Salary and benefits through March 31, 2006 at the
         annual rate in effect immediately prior to the Termination Date. For
         the purposes of the foregoing payments, the foregoing annual SALARY
         rate shall be the rate paid to EXECUTIVE without regard to any
         purported reduction or attempted reduction of such rate by the COMPANY.
         EXECUTIVE shall not be required to mitigate the amount of any payment
         provided for in this Paragraph 9 by seeking employment or otherwise,
         nor shall the amount of any payment or benefit provided for in this
         Paragraph 9 be reduced by any compensation earned by EXECUTIVE as the
         result of consultancy with or employment by another entity, by
         retirement benefits, by offset against any amount claimed to be owed by
         EXECUTIVE to the COMPANY, or otherwise.

10.      DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT. EXECUTIVE
         acknowledges that, by his employment, he has been and will be in a
         confidential relationship with the COMPANY and will have access to
         confidential information and trade secrets of the

                                       5

<PAGE>

         COMPANY, its subsidiaries and affiliates. Confidential information and
         trade secrets include, but are not limited to, customer, supplier, and
         client lists, marketing, distribution and sales strategies and
         procedures, operational and equipment techniques, business plans and
         system, quality control procedures and systems, special projects and
         technological research, including projects, research and reports for
         any entity or client or any project, research, report or the like
         concerning sales or manufacturing or new technology, EXECUTIVE
         compensation plans and any other information relating thereto, and any
         other records, files, drawings, inventions, discoveries, applications,
         processes, data, and information concerning the business of the COMPANY
         which are not in the public domain. EXECUTIVE agrees that in
         consideration of the execution of this AGREEMENT by the COMPANY:

         (a)      EXECUTIVE will not, during the term of this AGREEMENT or at
                  any time thereafter, use, or disclose to any third party,
                  trade secrets or confidential information of the COMPANY,
                  including but not limited to, confidential information or
                  trade secrets belonging or relating to the COMPANY, its
                  subsidiaries, affiliates, customers and clients or proprietary
                  processes or procedures of the COMPANY, its subsidiaries,
                  affiliates, customers and clients. Proprietary processes and
                  procedures shall include, but shall not be limited to, all
                  information which is known or intended to be known only to
                  executives of the COMPANY or others in a confidential
                  relationship with the COMPANY or its respective subsidiaries
                  and affiliates which relates to business matters.

         (b)      EXECUTIVE will not, during the term of this AGREEMENT,
                  directly or indirectly, under any circumstance other than at
                  the direction and for the benefit of the COMPANY, engage in or
                  participate in any business activity, including, but not limit
                  to, acting as a director, franchiser or franchisee,
                  proprietor, syndicate member, shareholder or creditor or with
                  a person having any other relationship with any other
                  business, company, firm occupation or business activity, in
                  any geographic area within the United States that is, directly
                  or indirectly, competitive with any business completed by the
                  COMPANY or any of its subsidiaries or affiliates during the
                  term of this AGREEMENT or thereafter. Should EXECUTIVE own 5%
                  or less of the issued and outstanding shares of a class of
                  securities of a corporation the securities of which are traded
                  on a national securities exchange or in the over-the-counter
                  market, such ownership shall not cause EXECUTIVE to be deemed
                  a shareholder under this Paragraph 10 (b).

         (c)      EXECUTIVE will not, during the term of this AGREEMENT, on his
                  behalf or on behalf of any other business enterprise, directly
                  or indirectly, under any circumstance other than at the
                  direction and for the benefit of the COMPANY, solicit or
                  induce any creditor, customer, supplier, officer, EXECUTIVE or
                  agent of the COMPANY or any of its subsidiaries or affiliates
                  to sever its relationship with or leave the employ of any such
                  entities.

         (d)      This Paragraph 10 and Paragraphs 11, 12 and 13 hereof shall
                  survive the expiration or termination of this AGREEMENT for
                  any reason.

                                       6

<PAGE>

         (e)      It is expressly agreed by EXECUTIVE that the nature and scope
                  of each of the provisions set forth above in this Paragraph 10
                  are reasonable and necessary. If, for any reason, any aspect
                  of the above provisions as it applies to EXECUTIVE is
                  determined by a court of competent jurisdiction to be
                  unreasonable, or unenforceable, the provision shall only be
                  modified to the minimum extent required to make the provisions
                  reasonable and/or enforceable, as the case may be. EXECUTIVE
                  acknowledges and agrees that his services are of a unique
                  character and expressly grants to the COMPANY or any
                  subsidiary, successor or assignee of the COMPANY, the right to
                  enforce the provisions above through the use of all remedies
                  available at law or in equity, including, but not limited to,
                  injunctive relief.

11.      COMPANY PROPERTY.

         (a)      Any patents, inventions, discoveries, applications or process,
                  designs, devised, planned, applied, created, discovered or
                  invented by EXECUTIVE in the course of EXECUTIVE'S employment
                  under this AGREEMENT and which pertain to any aspect of the
                  COMPANY'S or its respective subsidiaries' or affiliates'
                  business shall be the sole and absolute property of the
                  COMPANY, and EXECUTIVE shall make prompt report thereof to the
                  COMPANY and promptly execute any and all documents reasonably
                  requested to assure the COMPANY the full and complete
                  ownership thereof.

         (b)      All records, files, lists, including computer generated lists,
                  drawings, documents, equipment and similar items relating to
                  the COMPANY'S business which EXECUTIVE shall prepare or
                  receive from the COMPANY shall remain the COMPANY'S sole and
                  exclusive property. Upon termination of this AGREEMENT,
                  EXECUTIVE shall promptly return to the COMPANY all property of
                  the COMPANY in his possession. EXECUTIVE further represents
                  that he will not copy or cause to be copied, print out or
                  cause to be printed out any software, documents or other
                  materials originating with or belonging to the COMPANY.
                  EXECUTIVE additionally represents that, upon termination of
                  his employment with the COMPANY, he will not retain in his
                  possession any such software, documents or other materials.

12.      REMEDY. It is mutually understood and agreed that EXECUTIVE'S services
         are special, unique, unusual, extraordinary and of an intellectual
         character giving them a peculiar value, the loss of which cannot be
         reasonably or adequately compensated in damages in an action at law.
         Accordingly, in the event of any breach of this AGREEMENT by EXECUTIVE,
         including but not limited to, the breach of the non-disclosure,
         non-solicitation and non-compete clauses of Paragraph 10 hereof, the
         COMPANY shall be entitled to equitable relief by way of injunction or
         otherwise in addition to damages the COMPANY may be entitled to
         recover.

13.      REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. In order to induce the
         COMPANY to enter into this AGREEMENT, EXECUTIVE hereby represents and
         warrants to the COMPANY as follows: (i) EXECUTIVE hereby has the legal
         capacity and unrestricted right to execute and deliver this AGREEMENT
         and to perform all of his obligations hereunder; (ii) the execution and
         delivery of this AGREEMENT by EXECUTIVE and the

                                       7

<PAGE>

         performance of his obligations hereunder will not will not violate or
         be in conflict with any fiduciary or other duty, instrument, agreement,
         document, ,arrangement or other understanding to which EXECUTIVE is a
         party or by which he is or may be bound or subject; and (iii) EXECUTIVE
         is not a party to any instrument, agreement, document, arrangement or
         other understanding with any person (other than the COMPANY) requiring
         or restricting the use or disclosure of any confidential information or
         the provision of any employment, consulting or other services, except
         any confidentiality agreements unrelated to the COMPANY'S industry and
         having no relationship or impact of any kind whatsoever with respect to
         this AGREEMENT and the transactions contemplated hereby.

14.      NOTICES. All notices given hereunder shall be in writing and shall be
         deemed effectively given when hand-delivered or mailed, if sent by
         registered or certified mail, return receipt requested, addressed to
         EXECUTIVE at his address set forth on the first page of this AGREEMENT
         or to the COMPANY at its address set forth on the first page of this
         AGREEMENT or to such changed address as may be properly noticed
         hereunder.

15.      ENTIRE AGREEMENT. This AGREEMENT constitutes the entire understanding
         of the parties with respect to its subject matter and no change,
         alteration or modification hereof may be made except in writing signed
         by the parties hereto. Any prior or other agreements, promises,
         negotiations or representations not expressly set forth in this
         AGREEMENT are of no force or effect.

16.      SEVERABILITY. If any provision of the Agreement shall be unenforceable
         under any applicable law, then notwithstanding such unenforceability,
         the remainder of this AGREEMENT shall continue in full force and
         effect.

17.      WAIVERS, MODIFICATIONS. No amendment, modification or waiver of any
         provision of this AGREEMENT shall be effective unless the same shall be
         in writing and signed by each of the parties hereto, and then such
         waiver or consent shall be effective only in the specific instance and
         for the specific purpose for which given.

18.      INDEMNIFICATION. COMPANY shall indemnify EXECUTIVE against any and all
         claims of third parties arising out of his earlier services to the
         COMPANY and out of the performance of his duties pursuant to this
         AGREEMENT to the fullest extent permitted by law.

19.      ASSIGNMENT. Neither this AGREEMENT, nor any of EXECUTIVE'S rights,
         powers, duties or obligation hereunder, may be assigned by EXECUTIVE.
         This AGREEMENT shall be binding upon and inure to the benefit of
         EXECUTIVE and his heirs and legal representatives and the COMPANY and
         its successors and assigns.

20.      APPLICABLE LAW. This AGREEMENT shall be deemed to have been made,
         drafted, negotiated and the transactions contemplated hereby
         consummated and fully performed in the State of California, without
         regard to the conflicts of law rules thereof. Nothing contained in this
         AGREEMENT shall be construed so as to require the commission of any act
         contrary to law, and whenever there is any conflict between any
         provision of this AGREEMENT and any statue, law, ordinance, order or
         regulation, contrary to which the parties hereto have no legal right to
         contract, the latter shall prevail, but in such event any

                                       8

<PAGE>

         provision of this AGREEMENT so affected shall be curtailed and limited
         only to the extent necessary to bring it within applicable legal
         requirements.

21.      ARBITRATION; JURISDICTION AND VENUE; PREVAILING PARTY. All disputes or
         controversies between COMPANY and EXECUTIVE arising out of, in
         connection with or relating to this AGREEMENT shall be exclusively
         heard, settled and determined by arbitration before a retired Federal
         or California judge to be held in the City of Los Angeles, County of
         Los Angeles. The arbitration shall be administered by JAMS pursuant to
         its Comprehensive Arbitration Rules and Procedures. The parties also
         agree that judgment may be entered on the arbitrator's award by any
         court having jurisdiction thereof and the parties consent to the
         jurisdiction of any court located in the City of Los Angeles, County of
         Los Angeles, for this purpose. The arbitrator shall allocate all of the
         costs of the arbitration, including the fees of the arbitrator and the
         reasonable attorneys' fees and expenses of the prevailing party,
         against the party who did not prevail.

22.      FULL UNDERSTANDING. EXECUTIVE represents and agrees that he fully
         understands his rights to discuss all aspects of this AGREEMENT with
         his private attorney, that to the extent, if any, that he desires, he
         availed himself of this right, that he has carefully read and fully
         understands all of the provisions of this AGREEMENT, that he is
         competent to execute this AGREEMENT, that his agreement to execute the
         Agreement has not been obtained by any duress and that he freely and
         voluntarily enters into it, and that he has read this document in its
         entirety and fully understands the meaning, intent and consequences of
         this document.

23.      COUNTERPARTS. This AGREEMENT may be executed in any number of
         counterparts, each of which shall be deemed an original and all of
         which taken together shall constitute one and the same agreement.

24.      LEGAL REPRESENTATION. The parties hereto acknowledge that each has been
         represented by independent counsel of such party's own choice
         throughout all of the negotiations which preceded the execution of this
         Employment Agreement and in connection with the preparation and
         execution of this Employment Agreement or has had the opportunity to do
         so and has not availed himself of it.

                            [SIGNATURE PAGE FOLLOWS]

                                       9

<PAGE>

IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of the date
first above written.

                              MOTORCAR PARTS & ACCESSORIES, INC.

                              By:       _____________________________

                              Name:     _____________________________

                              Title:    _____________________________

                              ______________________________
                              SELWYN JOFFE

                              ACKNOWLEDGED BY THE BOARD OF DIRECTORS
                              OF MOTORCAR PARTS & ACCESSORIES, INC.:

                              ______________________________
                              Douglas Horn

                              ______________________________
                              Mel Marks

                              ______________________________
                              Murray Rosenzweig

                              ______________________________
                              Irving Siegel

                                       10

<PAGE>

                                    EXHIBIT A

As part of EXECUTIVE'S obligations to the COMPANY, EXECUTIVE will identify
prospective buyers and sellers who may be interested in acquiring or selling
businesses or lines of businesses upon terms and conditions and in a form
satisfactory to COMPANY (including any transaction resulting in a change of
control, and without regard to form, sometimes described herein as a "PROPOSED
TRANSACTION").

In the event of a closing of any PROPOSED TRANSACTION(s) at any time during the
term of this AGREEMENT, EXECUTIVE shall be entitled to a fee as provided in this
Paragraph. In any such event, the COMPANY shall pay EXECUTIVE a transaction fee
upon the closing of a PROPOSED TRANSACTION in an amount (the "TRANSACTION FEE")
equal to 1% of the "total consideration." The "total consideration" shall equal
(a) the sum of all cash consideration paid by the acquirer plus all Non-Cash
Consideration (as defined below) received as consideration for the transaction,
including any contingent payments of cash or securities and the aggregate amount
of any dividends (other than normal quarterly or annual cash dividends) or other
distributions declared by the acquired entity in connection with a PROPOSED
TRANSACTION, reduced by (b) any cash payments or any Non-Cash Consideration
subsequently returned to the acquirer pursuant to the agreement (the "Purchase
Agreement") out of an escrow account, through an offset against an earn-out
amount or through another holdback arrangement, regardless of the reason for
such return. "Non-Cash Consideration" shall have the following meaning: (i)
publicly traded securities shall be valued at the average of their closing
prices (as reported in The Wall Street Journal), for the five trading days
immediately prior to closing of the transaction between COMPANY and the other
party and (ii) any other non-cash consideration shall be valued at the fair
market value thereof as determined in good faith by the Board of Directors of
COMPANY. Debt assumed by the acquirer shall not constitute consideration or
Non-Cash Consideration for purposes of calculating the TRANSACTION FEE.

Subject to the terms and conditions of this paragraph, the TRANSACTION FEE shall
be deemed earned and payable upon receipt of the total consideration at the
closing with respect to a PROPOSED TRANSACTION and, with respect to contingent
or deferred payments, whether pursuant to promissory notes or other securities,
if any, from time to time, only upon the receipt thereof by the seller or holder
of its equity interests. If for any reason whatsoever, including, without
limitation, the act, omission, negligence or willful default of any party,
including the COMPANY, a PROPOSED TRANSACTION is not consummated, then EXECUTIVE
shall not be entitled to any TRANSACTION FEE. The TRANSACTION FEE shall, at
COMPANY'S sole option, be payable in kind, depending upon the form of
consideration paid by the acquirer, in the same proportions of cash and
securities as paid by the acquirer. In the event that the Purchase Agreement
provides that all or any part of the total consideration paid shall be deposited
into an escrow account at closing (the "ESCROWED PORTION"), then the amount of
the TRANSACTION FEE proportional to the ESCROWED PORTION shall not be payable
until the ESCROWED PORTION is released. If the ESCROWED PORTION is released in
installments, then a portion of EXECUTIVE'S TRANSACTION FEE will be payable in
proportion to each installment released and EXECUTIVE shall not be entitled to
receive any amount with respect to any ESCROWED PORTION which is returned to the
acquirer. However, in any instance where any cash or securities which have
previously been distributed to the seller or holder of its equity interests are
required to be returned to the acquirer for any reason, EXECUTIVE shall not be
required to return any portion of the TRANSACTION FEE. EXECUTIVE hereby agrees
that any

                                       11

<PAGE>

securities received by him as part of the TRANSACTION FEE hereunder shall be
acquired and held subject to the same restrictions, if any, applicable to the
securities issued by the acquirer or any affiliate thereof and that securities
delivered to EXECUTIVE may bear an appropriate legend with respect to any such
restrictions.

                                       12