Document:

AGREEMENT
                                    ---------

         THIS AGREEMENT (this  "Agreement") is made effective as of September 6,
2006, by and between NeoMedia  Technologies,  Inc., a Delaware  corporation (the
"Company") and CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the
"Investor" and together with the Company, the "Parties" and each, a "Party").

                                    RECITALS:

         WHEREAS,   the  Parties  entered  into  an  Investment  Agreement  (the
"Investment  Agreement")  pursuant to which the Company  issued to the  Investor
Twenty-Two  Million Dollars  ($22,000,000)  of the Company's  Series C Preferred
Shares on February 17, 2006 (the "Transaction Date"); and

         WHEREAS,  the  Parties  acknowledge  and  agree  that  pursuant  to the
Investment  Agreement,  the Investor is obligated to purchase  from the Company,
and the  Company  has the  right to sell to the  Investor,  an  additional  Five
Million Dollars  ($5,000,000) of Series C Preferred Shares of the Company on the
date the registration  statement,  which shall be filed pursuant to that certain
Investor  Registration  Rights  Agreement,  of even  date  with  the  Investment
Agreement,  is declared  effective by the United States  Securities and Exchange
Commission (the "Additional Funding"); and

         WHEREAS, the Parties desire to terminate all further obligations of the
Investor to fund to the  Company,  and the right of the Company to receive  from
the Investor, the Additional Funding.

         NOW, THEREFORE, in consideration of the mutual promises, conditions and
covenants  contained  herein and in the Investment  Agreement and other good and
valuable  consideration,  receipt of which is hereby  acknowledged,  the Parties
agree as follows:

                                   AGREEMENT:

         1. Termination. The Parties hereby agree to terminate the obligation of
the  Investor  to fund to the  Company,  and the right of the Company to receive
from  the  Investor,  the  Additional  Funding  under  or  with  respect  to the
Investment  Agreement  or any and all  documents  entered into by the Parties on
February 17, 2006 in connection with the Investment Agreement (collectively, the
"Transaction Documents"). As a result of this provision, neither the Company nor
the Investor shall have any further  rights or  obligations  with respect to the
Additional  Funding  under or with  respect to the  Transaction  Documents.  The
Company  acknowledges  and agrees that this Agreement  shall not effect or limit
the  Company's   obligations,   representations   and/or  warranties  under  the
Investment  Agreement and/or the Investor  Registration Rights Agreement,  dated
February 17,  2006,  by and between the Company and the  Investor,  or any other
agreements in connection with the Investor's purchase of shares of the Company's
Series C Preferred Stock.

         2. Recitals.  The Recitals  herein above are hereby  incorporated  into
this Agreement as if fully stated herein.

<PAGE>

         3. Governing Law;  Jurisdiction;  Jury Trial. All questions  concerning
the  construction,  validity,  enforcement and  interpretation of this Agreement
shall be  governed  by the  internal  laws of the State of New  Jersey,  without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New  Jersey or any other  jurisdictions)  that  would  cause the
application of the laws of any jurisdictions other than the State of New Jersey.
The Parties hereby  irrevocably  submit to the  non-exclusive  jurisdiction  and
venue of the  Superior  Court of New  Jersey,  sitting in Hudson  County and the
United States  District  Court for the District of New Jersey sitting in Newark,
New Jersey,  for the  adjudication  of any dispute  hereunder  or in  connection
herewith,  or with any transaction  contemplated hereby or discussed herein, and
hereby  irrevocably  waive,  and agree  not to  assert  in any  suit,  action or
proceeding,  any claim that it is not personally  subject to the jurisdiction of
any  such  court,  that  such  suit,  action  or  proceeding  is  brought  in an
inconvenient  forum or that the  venue of such  suit,  action or  proceeding  is
improper.  The Parties hereby  irrevocably waive personal service of process and
consent  to  process  being  served in any such suit,  action or  proceeding  by
mailing a copy  thereof to such Party at the address for such  notices to it set
forth in the Investment  Agreement and agree that such service shall  constitute
good and sufficient  service of process and notice  thereof.  Nothing  contained
herein  shall be deemed to limit in any way any  right to serve  process  in any
manner permitted by law. EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY
HAVE,  AND  AGREES NOT TO  REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY
DISPUTE HEREUNDER OR IN CONNECTION  HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

         4.  Counterparts.  This  Agreement  may be  executed in two (2) or more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
Party and  delivered to the other  Party;  provided  that a facsimile  signature
shall be  considered  due  execution  and shall be  binding  upon the  signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

         5.  Headings.  The headings of this  Agreement are for  convenience  of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.

         6.  Successors and Assigns.  This  Agreement  shall be binding upon and
inure to the benefit of the Parties and their respective successors and assigns.

         7. Further Assurances.  Each Party shall do and perform, or cause to be
done and  performed,  all such  further acts and things,  and shall  execute and
deliver all such other agreements,  certificates,  instruments and documents, as
the other  Party may  reasonably  request  in order to carry out the  intent and
accomplish the purposes of this Agreement.

         8. No Strict  Construction.  The language used in this Agreement is the
language  chosen by the Parties to express their mutual intent,  and no rules of
strict construction will be applied against any Party.

                                      -2-
<PAGE>

         9.  Changes  to the Terms of this  Agreement.  This  Agreement  and any
provision  hereof may only be amended by an instrument in writing  signed by the
Parties. The term "Agreement" and all reference thereto, as used throughout this
instrument,  shall mean this  instrument  as  originally  executed,  or if later
amended or supplemented, then as so amended or supplemented.

         10.  Failure  or  Indulgence  Not  Waiver.  No  failure or delay in the
exercise of any power,  right or privilege  hereunder  shall operate as a waiver
thereof,  nor shall any single or partial  exercise of any such power,  right or
privilege  preclude  other or further  exercise  thereof or of any other  right,
power or privilege.

                           [SIGNATURE PAGE TO FOLLOW]

                                      -3-
<PAGE>

         IN  WITNESS  WHEREOF,  the  Parties  have  signed  and  delivered  this
Agreement on the date first set forth above.

                                 NEOMEDIA TECHNOLOGIES, INC.

                                 By:     /s/ Charles T. Jensen
                                         ---------------------------------------
                                 Name:   Charles T. Jensen
                                 Title:  Chief Executive Officer

                                 CORNELL CAPITAL PARTNERS, LP

                                 By:     Yorkville Advisors, LLC
                                 Its:    General Partner

                                 By:     /s/ CORNELL CAPITAL PARTNERS, LP
                                         ---------------------------------------
                                 Name:   Mark A. Angelo
                                 Title:  Portfolio Manager

                                      -4-EMPLOYMENT AGREEMENT

      This  employment  contract  (the  "Agreement")  is  entered  into and made
effective  as of  September  ___,  2006 (the  "Effective  Date") by and  between
American Racing Capital, Inc., a Nevada corporation (the "Company"), and D. Davy
Jones, a resident of the State of Nevada (the "Employee").

                                    RECITALS

      WHEREAS,  the Company  desires to employ and retain the  Employee  for the
term  specified  herein in order to advance the  business  and  interests of the
Company on the terms and conditions set forth herein; and

      WHEREAS,  the  Employee  desires to provide his services to the Company in
such capacities, on and subject to the terms and conditions hereof; and

      WHEREAS,  the Company desires to provide the Employee with certain options
to  acquire  stock in the  Company  in  order  that  the  Employee  may have the
opportunity to participate in the growth and performance of the Company,  as set
forth herein; and

      NOW, THEREFORE,  the parties hereto,  intending to be legally bound, agree
as follows:

      1. Adoption of Recitals.  The Company and Employee  hereto adopt the above
recitals as being true and correct.

      2. Employment.

            (a)  Subject  to the terms and  conditions  set  forth  herein,  the
Company hereby employs Employee, and Employee hereby agrees to serve the Company
for a three-year  period from the Effective Date of this Agreement  ("Employment
Period").

      3. Duties and Responsibilities.

            (a)  During the  Employment  Period,  the  Employee  shall  serve as
President and Chief  Executive  Officer of the Company.  In such role,  Employee
shall  perform all  executive  and  administrative  duties,  all  functions  and
privileges incumbent with the position of President and Chief Executive Officer,
and any other duties as  reasonably  prescribed by the Board of Directors of the
Company (the "Board") from time to time; provided, however, that such duties and
responsibilities  are consistent with Employee's  position.  Employee shall also
serve as a member of the Board.  During the  Employment  Period,  Employee shall
perform and discharge faithfully,  diligently,  in good faith and to the best of
Employee's  ability such duties and  responsibilities.  The  Employee  agrees to
devote as much of his time as is reasonably  necessary to accomplish  his duties
and obligations under this Agreement.

            (b) Other Activities.  The Employee,  during the Employment  Period,
may engage in other activities for compensation  outside his employment with the
Company, as long as these activities do not materially interfere with or detract
from the  performance of Employee's  duties or constitute a breach of any of the
provisions contained in this Agreement.  Those activities will include but shall
not be  limited  to  serving  in a  consulting  role to any other  affiliate  or
subsidiary of the Company.

                                     - 1 -
<PAGE>

      4. Compensation.

            (a) Base Salary. During the Employment Period, the Company shall pay
to Employee an annual base salary ("Base Salary") of One Hundred Twenty Thousand
Dollars  ($120,000.00)  payable on a bi-monthly basis or otherwise in accordance
with the Company's  customary  payroll  practices,  throughout  the term of such
employment   subject  to  the   provisions   of  Section  6  hereof   (governing
Terminations),  and subject to any  applicable tax and payroll  deductions.  The
Base Salary shall increase by five percent (5%) (the "Annual  Salary  Increase")
on the anniversary  date of the Effective Date on the same date each year during
the  Employment  Period.  The Board shall review the Annual Salary  Increase and
shall have the authority to modify the terms of the Annual Salary Increase.  Any
such  modifications  in the Annual Salary  Increase shall be communicated to the
Employee  thirty  (30) days  prior to the date when the Annual  Salary  Increase
would be effectuated.

            (b) Bonus. In addition to the Salary,  Employee shall be entitled to
such bonuses and benefits as may be determined  by the Board.  Any bonus granted
pursuant to this  Section 4(b) shall be paid within  forty-five  (45) days after
the end of the fiscal year for which such bonus is earned.

            (c) Stock  Options.  During the Employment  Period,  the Company may
issue to the  Employee  stock  options (the "Stock  Option") to acquire  250,000
shares  of the  Company's  common  stock,  par value  $.001  per share  ("Common
Stock"). The number of shares to be acquired pursuant to the Stock Option may be
determined by the Board of Directors at the time of issuance and may differ from
the  number set for  herein.  After the  expiration,  or  exercise  of the Stock
Option,  Employee  shall be entitled to  participate  in the  Company's  regular
employee stock option program in the same manner as the other  executives of the
Company and its affiliates.

            (d) Other Benefits.  During the Employment Period, Employee shall be
entitled to apply to participate in any and all employee benefit plans, programs
or  arrangements  (collectively  the  "Plans"),  implemented  by the Company and
available to  employees of the Company,  including  medical,  401(k)  plans,  or
similar plans, at such time when the Company will be able to adopt and implement
these  plans.  Employee's  participation  in such plans shall be governed by the
terms of the respective plans.

            (e) Fringe benefits.

                  (i) During the  Employment  Period,  the Company shall pay for
directly or  reimburse  Employee for all  reasonable,  customary  and  necessary
business-related  expenses incurred by Employee in connection with the duties of
Employee hereunder,  in accordance with the applicable Company policy, as may be
revised  from time to time,  and upon  submission  by Employee to the Company of
such written evidence of such expense as the Company may require.

                                     - 2 -
<PAGE>

                  (ii) The Employee shall be entitled to four (4) vacation weeks
as provided in the  Company's  policies.  Employee's  vacation  accrual shall be
capped at two (2) years' worth of vacation  (which in aggregate shall be no more
than eight (8) weeks of vacation.

                  (iii)  Nothing  paid  to  Employee  under  any  Company  Plan,
bonuses,  or fringe benefit  arrangements  shall be deemed to be in lieu of Base
Salary payable to Employee hereunder.

      5. Restrictive Covenants.

            (a) Non Disclosure of Confidential Information.

                  (i) During and at all times after the Employment  Period,  the
Employee shall not, directly or indirectly, without the prior written consent of
the Board,  or a person  duly  authorized  thereby,  other than a person to whom
disclosure  is  reasonably  necessary  or  appropriate  in  connection  with the
performance by Employee of the duties of Employee as an employee of the Company,
access, maintain, keep, disclose or use for the benefit of himself or herself or
any other person, corporation, partnership, joint venture, association, or other
business organization,  any of the trade secrets or Confidential  Information of
the  Company.  If Employee is legally  required  to  disclose  any  Confidential
Information, Employee will notify Company prior to doing so by providing Company
with  written  notice  ten (10) days in  advance of the  intended  or  compelled
disclosure.  Notice  shall be  provided  as defined in Section 7 below.  For the
purposes  of  this  Agreement,   "Confidential   Information"   shall  mean  all
information,  whether  written or oral,  tangible or  intangible,  of a private,
secret,  proprietary or confidential nature, of or concerning the Company or any
of its  subsidiaries  or affiliates and their business and  operations,  and all
files, letters,  memoranda,  reports,  records, computer disks or other computer
storage medium,  data,  models or any  photographic or other tangible  materials
containing such information including without limitation, any sales, promotional
or marketing plans, programs, techniques, practices or strategies, any expansion
plans (including existing and entry into new geographic and/or product markets),
and any customer lists.

                  (ii) The  Employee  hereby  assigns to the  Company all right,
title and interest in such Work Product made or conceived by the Employee  alone
or jointly with others  (whether  during the Employment  Period or any period of
employment  with the Company or any of its  affiliates  following the Employment
Period) which relates to the business of the Company or any such affiliate. This
assignment shall include (a) the right to file and prosecute patent applications
on such Work Product in any and all countries, (b) the patent applications filed
and patents issuing thereon and (c) the right to obtain copyright,  trademark or
trade name protection for any such Work Product. The Employee shall promptly and
fully  disclose all such Work Product to the Company and  reasonably  assist the
Company,  at the  Company's  expense,  in obtaining  and  protecting  the rights
therein (including patents thereon) in any and all countries; provided, however,
that said Work  Product  will be the  property  of the  Company,  whether or not
patented or registered for copyright, trademark or trade name protection, as the
case may be. Work Product conceived by the Employee, which is not related to the
business of the  Company,  will remain the  property  of the  Employee.  For the
purposes  of this  Agreement,  "Work  Product"  shall mean the data,  materials,
documentation,  computer programs, inventions,  (whether or not patentable), and
all works of  authorship,  including all worldwide  rights therein under patent,
copyright, trade secret, confidential information, or other proprietary right.

                                     - 3 -
<PAGE>

            (b)  Non-Competition.  In  consideration  of his  employment and the
other benefits arising under this Agreement, the Employee agrees that during the
Employment Period, and for (i) the greater of the balance of the Employment Term
or two (2) years following the termination of this Agreement by the Company "for
cause" or  termination  of this  Agreement by the Employee or (ii) six months in
the event the Employee is terminated  "without cause"  (provided that he Company
continues to make the payments due the Employee hereunder), the Employee (or any
affiliate) shall not directly or indirectly:

                  (i)  During  the  Employment  Period,  the  Employee  (or  any
affiliate) shall not directly or indirectly:

                  (ii) Own, manage, operate, join, control or participate in the
ownership,  management,  operation or control of, or be employed or retained by,
render  services  to,  provide  financing  (equity  or debt) or  advice  to,  or
otherwise be connected in any manner with any business that at any time competes
with any business of the Company (such as auto,  motorbike,  or vehicle  racing,
driving school or motorsports  related,  anywhere in North  America);  provided,
however,  that nothing  contained herein shall prevent the purchase or ownership
by the  Employee of less than 1% of the  outstanding  equity  securities  of any
class of securities of a company  registered  under Section 12 of the Securities
Exchange Act of 1934, as amended;

                  (iii) For any reason,  (1) induce any  customer or supplier of
the Company or any of its subsidiaries or affiliates to patronize or do business
with any business  directly or indirectly  in  competition  with the  businesses
conducted by the Company or any of its  subsidiaries or Affiliates in any market
in which the Company or any of its subsidiaries or Affiliates does business; (2)
canvass,  solicit or accept from any  customer or supplier of the Company or any
of its subsidiaries or affiliates any such competitive  business; or (3) request
or advise any  customer or vendor of the Company or any of its  subsidiaries  or
Affiliates  to  withdraw,  curtail or cancel  any such  customer's  or  vendor's
business with the Company or any of its subsidiaries or Affiliates; and

                  (iv) For any reason,  employ,  or knowingly permit any company
or business directly or indirectly  controlled by him, to employ, any person who
was  employed  by the Company or any of its  subsidiaries  or  affiliates  at or
within the prior one (1) year,  or in any manner  seek to induce any such person
to leave his or her  employment;  provided such  restriction  shall not apply to
general  solicitations  or  advertisements  posted on the web or  published in a
newspaper or other media.

            (c) Need for Restrictions. The Employee acknowledges and agrees that
each of the restrictive  covenants contained in this Section 5 is reasonable and
necessary  to  protect  the  legitimate   business  interests  of  the  Company,
including,  without limitation,  the need to protect the Company's trade secrets
and the Confidential Information.

            (d) Breach of Restrictive Covenants. In the event of a breach by the
Employee of any restrictive covenant set forth in Section 5, the Employee agrees
that such a breach would cause  irreparable  injury to the Company,  and that if
the Company  shall bring legal  proceedings  against the Employee to enforce any
restrictive covenant,  the Company shall be entitled to seek all available civil
remedies,  at law or in equity,  including,  without limitation,  an injunction,
damages, attorneys' fees, and costs. Employee agrees that given the significance
of the Company's Confidential Information,  Employee, as a material part of this
Agreement, acknowledges and agrees that he will not oppose the Company's request
to post only the minimum bond  required by law in the event the relief sought by
the Company requires that the Company post a bond. Employee  specifically agrees
that he or she will  not make any  argument  or seek any  order  from the  court
requiring  the  posting  of a bond  greater  than  the  minimum  imposed  by any
applicable statute.

                                     - 4 -
<PAGE>

            (e)  Construction,  Survival.  If the period of time or scope of any
restrictions specified in this Section 5 should be adjudged unreasonable,  void,
or  unenforceable  in any proceeding,  then the period of time or scope shall be
reduced or altered so that the restrictions may be enforced as is adjudged to be
reasonable and consistent with public policy and law. All the provisions of this
Section 5 shall survive the Employment Period.

            (f) Successors and Assigns. The restrictive covenant may be enforced
by the Company and its successors and assigns.

      6. Termination.

            (a) Termination upon Death.  Employee's  employment  hereunder shall
terminate upon the death of Employee;  provided,  however,  that for purposes of
this Agreement the Date of Termination based upon the death of Employee shall de
deemed to have  occurred  on the last day of the month in which the death of the
Employee shall have occurred.

            (b)  Termination  upon  Incapacity.  If the  Employee  is  unable to
perform the  essential  functions of his  position,  with or without  reasonable
accommodation,  for a period in excess of twelve (12) weeks  during the previous
twelve  (12)  months,  due  to a  physical  or  mental  illness,  disability  or
condition,  the Company may terminate Employee's employment hereunder at the end
of any calendar month by giving  written Notice of Termination to Employee.  Any
questions as to the existence,  extent or  potentiality of illness or incapacity
of Employee upon which the Company and Employee cannot agree shall be determined
by a qualified independent physician selected and paid for by the Company who is
acceptable to Employee or his personal  representative,  as the case may be. The
determination  of such  physician  certified  in writing to the  Company  and to
Employee  shall be final and  conclusive  for all  purposes  of this  Agreement.
Section 6 (b) is intended to be  interpreted  and  applied  consistent  with the
Americans with  Disabilities Act and Sections 503 and 504 of the  Rehabilitation
Act of 1973;  the Family and  Medical  Leave Act of 1993;  the  California  Fair
Housing  and  Employment  Act;  and any  state  or local  ordinance  prohibiting
discrimination, harassment and/or retaliation on the basis of a disability.

            (c)  Termination  for Cause.  The Company may  terminate  Employee's
employment  hereunder  for Cause by giving  written  Notice  of  Termination  to
Employee  (as  defined  below in Section 6 (f) hereof.  The Date of  Termination
shall be specified in the Notice of  Termination  and may be immediate.  For the
purpose  of  this  Agreement,  the  Company  shall  have  "Cause"  to  terminate
Employee's  employment  hereunder  upon  Employee's  (i)  continued  failure  to
materially  perform and  discharge the duties and  responsibilities  of Employee
under this Agreement after receiving written notice  specifically  setting forth
such failures and allowing  Employee thirty (30) days to cure such failures,  if
so  curable,  (provided,  however,  that after one such notice has been given to
Employee during the Employment Period,  Company is no longer required to provide
time to cure subsequent failures for the reasons specified in the initial notice
under this Subsection 6(c)(i)), or (ii) any breach by Employee of the provisions
of Sections 5; or (iii) Employee is convicted of a felony under federal or state
law  involving  moral  turpitude,   or  a  determination  by  the  Board,  after
consideration  of all available  information  and following the  procedures  set
forth below,  that  Employee  has  willfully  and  materially  violated  Company
policies  or  procedures  involving  discrimination,   harassment,   alcohol  or
substance abuse, or workplace violence; or (iv) misconduct which, in the opinion
and sole, but reasonable  discretion of the Company, is materially  injurious to
the Company,  or which constitutes a material breach of this Agreement,  Company
policy,  or  Employee's  duties to the Company;  provided  however that Employee
shall have thirty (30) days following written notice of such breach or violation
to cure the  breach or  violation,  (v)  Employee's  actions or  omissions  that
constitute fraud, or gross misconduct that have a material adverse effect on the
Company.

                                     - 5 -
<PAGE>

            (d)  Termination  by the  Company  without  Cause.  The  Company may
terminate the  Employee's  employment at any time without Cause upon thirty (30)
calendar days notice by delivering  written notice to the Employee.  The Date of
Termination  shall be specified in the Notice of Termination;  provided however,
that the Date of Termination shall not be earlier than thirty (30) calendar days
after delivery of the Notice of Termination.

            (e)  Termination  by the  Employee  for Good  Reason.  Employee  may
terminate this Agreement for Good Reason.  For purposes of this Agreement  `Good
Reason' shall mean (i) a material  breach by the Company or its affiliate of its
obligations  under this Agreement,  or any other agreement  between Employee and
the  Company  or a  Company  affiliate,  or  (ii)  any  material  change  in the
assignment  of duties or  responsibilities  to  Employee  by the Board which are
inconsistent in a material and adverse respect with Employee's  position causing
it to be of materially  less stature or  responsibility.  Any such breach by the
Company,  if curable,  may be cured within ten (10) days after notice thereof to
the Company.

            (f)  Termination  by  the  Employee.  Employee  may  terminate  this
Agreement  by  delivering  written  notice to the Company.  The  Employee  shall
provide  ninety (90)  calendar days written  notice to the Company.  The Date of
Termination  shall be specified in the Notice of Termination;  provided however,
that the Date of Termination shall not be earlier than ninety (90) calendar days
after delivery of the Notice of Termination.

            (g) Notice of  Termination.  Notice of  Termination  to effectuate a
termination  under Section 6 shall be made in accordance  with Notice defined in
Section 8. For purposes of this Agreement,  a "Notice of Termination" shall mean
a notice, in writing, which shall indicate the specific termination provision of
this  Agreement  relied  upon as the basis for the  Termination  and the Date of
Termination.  The Date of  Termination  shall not be earlier  than the date such
Notice of Termination is delivered (as defined above);  provided  however,  that
the  Company,  at its option,  may elect to have the Employee not report to work
after the date of the written notice.

                                     - 6 -
<PAGE>

            (h) Date of  Termination.  "Date of  Termination"  means the date on
which this Agreement shall terminate  (except for those provisions which survive
termination as specified in this Agreement) in accordance with the provisions of
this Section 6.

            (i) Obligation to Pay.

                  (i) For  Terminations  under  Subsection  6(a),  the estate of
Employee shall be paid all sums otherwise payable to Employee, including without
limitation  all  pro-rated  Base Salary,  Bonuses or other  benefits  accrued or
accruable  to  Employee  through  the end of the  month  in which  the  death of
Employee occurred.  The Bonuses will be pro-rated to the Date of Termination and
will be pro-rated after receipt of year-end results.

                  (ii) For  Terminations  under Subsection 6(b), the Employee or
the person charged with legal  responsibility for the Employee's estate shall be
paid all sums  otherwise  payable to the Employee,  including the pro-rated Base
Salary,  Bonuses and other benefits accrued or accruable to the Employee through
the Date of Termination, and the Company shall have no further obligation to the
Employee  under this  Agreement.  The Bonuses  will be  pro-rated to the Date of
Termination  and will be  pro-rated  after  receipt of  year-end  results to the
extent any additional sums would be owed after receipt of year end results.

                  (iii) For  Terminations  for Cause under  Subsection 6(c), the
Company shall pay the Employee his Base Salary and benefits  accrued through the
Date of Termination.  The Employee shall receive  pro-rated Bonuses and benefits
through  the Date of  Termination  and will not be entitled to receive any other
Bonuses or  benefits  not earned or accrued as of the Date of  Termination.  The
Bonuses will be pro-rated to the Date of Termination and will be pro-rated after
receipt of year-end results. The Company shall have no further obligation to the
Employee under this Agreement.

                  (iv) For Terminations without Cause under Subsection 6(d), the
Employee  shall  be  entitled  to the  lesser  of (i) the  Base  Salary  for the
remainder  of the  Employment  Period,  as well as medical  and dental  benefits
included in section 4(d) of this  Agreement  (provided that such benefits are in
place at the time of termination), without regard to the Date of Termination set
forth in the Notice of Termination or (ii) the Base Salary for two (2) years, in
one lump sum. The Employee shall receive  pro-rated Bonuses and benefits through
the Date of Termination and will not be entitled to receive any other Bonuses or
benefits not earned or accrued as of the Date of  Termination.  The Bonuses will
be pro-rated to the Date of Termination  and will be pro-rated  after receipt of
year-end results.

                  (v) For  Terminations  for Good Reason under  Subsection 6(e),
the  Employee  shall be  entitled  to the lesser of (i) the Base  Salary for the
remainder  of the  Employment  Period,  as well as medical  and dental  benefits
included in section 4(d) of this  Agreement  provided  that such benefits are in
place at the time of termination), without regard to the Date of Termination set
forth in the Notice of Termination or (ii) the Base Salary for two (2) years, in
one lump sum. The Employee shall receive  pro-rated Bonuses and benefits through
the Date of Termination and will not be entitled to receive any other Bonuses or
benefits not earned or accrued as of the Date of  Termination.  The Bonuses will
be pro-rated to the Date of Termination  and will be pro-rated  after receipt of
year-end results.

                                     - 7 -
<PAGE>

                  (vi) For  Terminations by the Employee under  Subsection 6(f),
the Company shall pay the Employee his Base Salary and benefits  accrued through
the Date of  Termination.  The  Employee  shall  receive  pro-rated  Bonuses and
benefits through the Date of Termination and will not be entitled to receive any
other  Bonuses or benefits not earned or accrued as of the Date of  Termination.
The Bonuses will be pro-rated to the Date of  Termination  and will be pro-rated
after receipt of year-end results.  The Company shall have no further obligation
to the Employee under this Agreement.

      7.  Notice.  For the  purpose  of this  Agreement,  notices  and all other
communications to either party hereunder  provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when  delivered in person
or three (3) business days after being mailed by certified mail,  return receipt
requested,  postage  prepaid,  two (2) business  days after being  provided to a
courier  for next  business  day  delivery,  or 24  hours  after  being  sent by
telecopy:

   in the case of the Company to:                American Racing Capital
                                                 P.O. Box 563
                                                 Zephyr Cove, NY 89448
                                                 Attention:  Davy Jones
                                                 Facsimile:

   in the case of Employee to:                   D. Davy Jones
                                                 920 Bolen Circle
                                                 Gardnerville, NY 89448
                                                 Telephone:  (775) 265-9970
                                                 Facsimile:  (775) 790-0880

   With a copy (not constituting notice) to:
                                                 --------------------------
                                                 --------------------------
                                                 --------------------------
                                                 --------------------------

or to such other  address as either  party  shall  designate  by giving  written
notice of such change to the other party.

      8. Director's and Officer's Liability  Insurance.  To protect the Employee
from any liability,  loss, claims,  damages, or costs,  including legal fees and
costs,  prior to any public  offering  of any  securities  of the  Company,  the
Company,  at such time when the Company  shall have  sufficient  funds to do so,
shall purchase and maintain  director's and officer's  liability  insurance (the
"D&O Insurance") in an amount not less than One Million Dollars ($1,000,000), or
in such amount as is later agreed upon by the Employee and the Company and which
shall  include a duty to defend  clause.  The policy  shall name the Employee by
name or  title  as an  insured  in each  (and  all) of his  duties  and  titles,
including President, Chief Executive Officer and member of the Board.

      9. Prior Agreements. The Employee represents to the Company (a) that there
are no  restrictions,  agreements,  or  understandings  whatsoever  to which the
Employee  is a party  which  would  prevent or make  unlawful,  impractical,  or
impossible the Employee's  execution of this Agreement or employment  hereunder,
or which would prevent him fully, faithfully, and completely from performing all
of his  obligations to the Company,  (b) that the  Employee's  execution of this
Agreement  and  employment  hereunder  shall  not  constitute  a  breach  of any
contract, agreement or understanding,  oral or written, to which the Employee is
a party or by which the Employee is bound, and (c) that the Employee is free and
able to execute this  Agreement and to enter into  employment by the Company.  A
written or oral notice or complaint  that Employee  breached  this  provision or
violated a  restrictive  covenant or an agreement  not to disclose  confidential
information  shall subject the Employee,  at the Company's sole  discretion,  to
immediate termination with cause,  irrespective of any advance notice provisions
contained in Section 8 above.  The Employee  also agrees to fully  indemnify the
Company for any and all direct damages,  costs and/or reasonable attorney's fees
incurred by the Company  that result or arise in any manner from any claims that
were related to the Employee's  breach of a restrictive  covenant,  an agreement
not to  disclose  confidential  information,  or other  duties  and  obligations
Employee owed or owes to any third party;  provided however, that Employee shall
not be  responsible  for special or  consequential  damages,  nor shall any such
damages exceed the amount of monetary compensation paid to Employee hereunder.

                                     - 8 -
<PAGE>

      10. Right to Review and Seek  Counsel.  The Employee  hereby  acknowledges
that he has actively engaged in the discussion and negotiation of this Agreement
and its terms and has had full and fair  opportunity  to discuss  and review the
Agreement  and its terms  with any legal or other  advisor of his choice and has
either done so, or voluntarily  declined to do so. Employee  further agrees that
this Agreement has been fully  negotiated by parties acting at arms' length with
full  opportunity  to negotiate  terms such that this  Agreement  and all of its
terms shall be deemed to have been drafted mutually by both parties.

      11. Waiver.  The waiver by the Company of a breach or threatened breach of
this  Agreement  by the  Employee  shall  not be  construed  as a waiver  of any
subsequent breach by the Employee.  Inaction or silence by the Company shall not
be deemed a waiver. No waiver of any breach is effective unless expressly stated
in writing and signed by a duly authorized member of the Board or its authorized
designee.

      12.  Entire  Agreement/Amendments.  No provision of this  Agreement may be
modified, waived or discharged unless such waiver,  modification or discharge is
approved  by the Board and  agreed to in  writing  signed by  Employee  and such
officer as may be specifically  authorized by the Board. This Agreement contains
the  entire   understanding   of  the  parties   hereto  and  no  agreements  or
representations,  oral or  otherwise,  express or implied,  with  respect to the
subject  matter hereof have been made by either  party,  which are not set forth
expressly  in  this  Agreement.  This  Agreement  supersedes  all  negotiations,
preliminary  agreements,  and all  prior  and  contemporaneous  discussions  and
understandings  of the parties  hereto  and/or  their  affiliates.  The Employee
acknowledges that he has not relied on any prior or contemporaneous  discussions
or understandings in entering into this Agreement.

      13.  Governing  Law.  This  Agreement  shall be governed and  construed in
accordance  with the laws of the State of Nevada  without regard to conflicts of
law.

                                     - 9 -
<PAGE>

      14. Consent to Personal Jurisdiction and Venue. Each party hereby consents
to personal  jurisdiction  and  exclusive  venue of the Federal and State courts
located in San Diego, California,  and waive any objections to such courts based
on venue in connection  with any claim or dispute  arising under this Agreement.
For purposes of this Section,  the term "Employee"  includes any business entity
owned or controlled by the Employee.

      15.  Headings  and  Captions.  The titles and captions of  paragraphs  and
subparagraphs  contained  in this  Agreement  are provided  for  convenience  of
reference  only,  and  shall  not be  considered  terms  or  conditions  of this
Agreement.

      16. Validity.  The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

      17.  Survival.  The  provisions  of this  Agreement  shall not survive the
termination of Employee's employment  hereunder,  except that all the provisions
of Section 5, Section 8, Section 9, and Section 10 shall survive  termination of
this Agreement and termination of Employee's employment, and be binding upon the
parties.

      18. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Company and its successors  and assigns,  and the Employee
agrees that this Agreement may be assigned by the Company. This Agreement is not
assignable by the Employee.

      19.  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts  and by facsimile,  each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day, month and year first above mentioned.

American Racing Capital, Inc.               Employee

By:
     -------------------------------
Name:                                       By: /s/ D. Davy Jones
     -------------------------------             --------------------------
Title:                                              D. Davy Jones
     -------------------------------

                                     - 10 -

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