STANDBY OR PERFORMANCE LETTER OF CREDIT
                                                       APPLICATION AND AGREEMENT


         This  Agreement   consists  of  three  parts.  The  first  part  is  an
Application  for a  Standby  or  Performance  Letter  of  Credit  in  which  the
Applicant(s)  sets  forth the terms of the  Letter of Credit  that it (they) has
(have)  asked us to issue.  The  second  part,  which will apply in the event we
issue the Letter of Credit,  sets forth the Terms and conditions that govern the
relationship  between the Applicant(s) and us. Among other things, it covers the
obligation of the  Applicant(s) to reimburse us, the security  provide for their
obligations,  that upon the occurrence of certain events the  Applicant(s)  will
deliver additional  security for its (their)  obligations and defines the rights
of, and remedies available to, us under various circumstances. The third part is
an  Authorization  of the Account  Party,  if the Account  Party is not also the
Order Party, under which the Account Party agrees to be bound by this Agreement.

Part I:  Application for Standby or Performance Letter of Credit

TO:      THE CHASE MANHATTAN BANK, N.A.
         Letter of Credit Division
         4 Chase Metro Tech Center
         Brooklyn, New York 11245

The  undersigned  hereby  request(s) that you issue your  irrevocable  letter of
credit by:

|X| Airmail   |_| Teletransmission (Specify means ________)  |_| Courier Service
                  (if none specified, issuer may choose)

IN FAVOR OF                      TO BE ADVISED THROUGH:    |_| Check Box if also
                                                           to be confirmed by
                                                           Advising Bank


National Union Fire Ins. Co.     
----------------------------     ----------------------------- 
of Pittsburg, PA                 
----------------------------     ----------------------------- 
99 John Street - 10th Floor      
----------------------------     ----------------------------- 
New York, NY 10270               
----------------------------     ----------------------------- 
-or-
P.O. Box 923                     
----------------------------     ----------------------------- 
Wall Street Station              
----------------------------     ----------------------------- 
New York, NY 10268               
----------------------------     ----------------------------- 
 ("Beneficiary")

By order of      Rent-A-Wreck of America, Inc.
           -----------------------------------------
                        ("Order Party")
for account of     Consolidated American Rental Insurance Co., Ltd.
              ------------------------------------------------------
                                 ("Account Party")
Up to an aggregate amount of   $500,000 (U.S. Dollars)
                            --------------------------------

Available by (complete A or B, NOT both):
                               ---

        A.    |_| Drafts at sight on the issuer payable at the Issuer's counters
                  accompanied by:

                       See attached.



        B.    |_| Tested Telex Demand to the Issuer stating:



EXPIRATION DATE:

Drafts and  documents  must be dated and  presented  to, or Tested  Telex Demand
received by, the issuer not later than 5/ /98.
                                      ---------
  
|_|      Credit  to  contain  "Evergreen" clause  with no less than   60   days'
         notice of non-renewal to the Beneficiary.                  ------

|_|      Partial drawings prohibited.

Unless  otherwise  stated  herein,  the  negotiating/paying  bank  (if  any)  is
authorized  to send all documents to you in one airmail or courier  service,  if
available.

|_|      Special Instructions: Specify  below.  If  additional space  is needed,
         include additional sheets.  These sheets form  an integral part of this
         Application.
<PAGE>
Part II: Terms and Conditions

In  consideration  of the issuance by the Bank of the Credit as requested in the
Application, the Applicant hereby agrees with the Bank as follows:

1. Definitions. The following terms shall have the meanings set forth below:

         (1) "Applicant"  means each party signing the  Application,  whether as
Order Party or as Account Party.

         (2) "Agreement" means the Application, the Terms and Conditions and the
Authorization.

         (3) "Application" means Part I of this Agreement and shall also include
all subsequent  written and oral requests by the Applicant for amendments to the
Credit.

         (4) "Bank" means the issuer of the Credit as indicated in Part I.

         (5) "Credit"  means the letter of credit issued by the Bank by order of
the Applicant  pursuant to the  Application,  as such Credit may be amended from
time to time.

         (6) "Instrument" means any draft, receipt, acceptance, teletransmission
(including  but not  limited  to telex or cable)  or other  written  demand  for
payment under the Credit.

         (7) "Third  Party" means any person or entity other than the  Applicant
liable for the obligations of the Applicant under this Agreement.

         (8)  "Uniform  Customs  and  Practice"  means the  Uniform  Customs and
Practice for  Documentary  Credits  (1993  Revision),  International  Chamber of
Commerce  Publication No. 500, or any subsequent  revision thereof adhered to by
the Bank on the date the Credit is issued.

2. Reimbursement Obligation.

         A. Payment.  The Applicant will pay the Bank, on demand,  at the Bank's
principal  office,  in immediately  available  funds, the amount required to pay
each  instrument  or other  amount  paid or to be paid  under  the  Credit  upon
documents presented in substantial compliance with the terms of the Credit. Such
payment shall be made with interest from the date of the Bank's  payment of such
Instrument or other amount paid by the Bank to the date of  reimbursement.  Such
payments  shall be made free and clear of and without  deduction for any present
or future taxes, levies, imposts,  deductions,  charges,  withholdings,  and all
liabilities with respect thereto.

         B. Authorization To Charge Accounts. The Applicant expressly authorizes
the Bank (but the Bank shall not be  required),  without  demand for  payment or
notice to the Applicant,  which are hereby expressly  waived,  to charge,  debit
and/or setoff against the demand deposit account  referred to at the end of this
Agreement and any other  account(s)  maintained by the Applicant with any office
of the  Bank or any  subsidiary  or any  affiliate  of the  Bank  (now or in the
future, whether general or special, time or demand, matured or unmatured) and to
apply  immediately,  any balance of deposits and any sums  credited by or due or
payable  from the Bank to the  Applicant  in such  account or  accounts,  to the
payment of any and all of Applicant's  obligations  and  liabilities to the Bank
hereunder,  including  without  limitation,  obligations and  liabilities  under
Paragraphs 2A and C and Paragraphs,  3 and 8 hereunder, all without prejudice to
the rights of the Bank against the Applicant with respect to any and all amounts
which may be or remain unpaid.

         C.  Foreign  Currency  Obligations.  If the  Instrument  is in  foreign
currency,  the  Applicant's  payment shall be in United  States  currency at the
Bank's then current  selling rate for cable transfers to the place of payment of
the  Instrument  on the date of such payment or of the Bank's  settlement of its
obligation,  as the Bank may require.  If, for any cause, on the date of payment
or  settlement,  as the case may be,  there is no selling  rate or other rate of
exchange  generally  current  in New  York for  effecting  such  transfers,  the
Applicant  will pay the Bank on  demand an  amount  in  United  States  currency
equivalent to the Bank's actual cost of settlement of its obligation  however or
whenever the Bank shall make such  settlement,  with  interest  from the date of
settlement to the date of payment by the  Applicant.  The Applicant  will comply
with all governmental  exchange  regulations now or hereafter  applicable to the
Credit or  Instrument  or payments  related  thereto  and will pay the Bank,  on
demand,  in  United  States  currency,  such  amount  as the Bank may have  been
required to expend on account of such regulations.

3. Payment of  Commissions,  Expenses,  Counsel  Fees,  Interest and  Additional
Costs.

         A. Commissions, Etc. The Applicant will pay the Bank, on demand, at its
principal  office at 1 Chase  Manhattan  Plaza,  New York,  New York 10081,  the
Bank's  commission  and all charges,  costs and expenses paid or incurred by the
Bank in connection with the Credit,  including fees and charges of counsel,  and
costs allocated by the Bank's  internal legal  department in connection with the
preparation,  performance  or  enforcement  of  this  Agreement  or the  Credit.
Commissions  payable  hereunder shall be at the rate customarily  charged by the
Bank at the time in like circumstances.

         B.  Interest.  The Applicant  agrees to pay interest on any amounts due
under  this  Agreement  which  are not  paid  when due at 3% plus  that  rate of
interest from time to time announced by the Bank at its principal office, as its
prime  commercial  lending  rate,  which rate shall not exceed the maximum  rate
permissible under applicable law.

         C. Additional Costs. The Applicant shall also pay to the Bank on demand
such  amounts as the Bank in its sole  discretion  determines  are  necessary to
compensate  it for any cost  attributable  to its  issuing  or having the Credit
outstanding. Such costs shall include any cost resulting from the application of
any law or regulation to the Bank  regarding  any reserve,  assessment,  capital
adequacy  or  similar   requirement   relating  to  letters  of  credit  or  the
reimbursement  agreements  with  respect  thereto or to similar  liabilities  or
assets of the Bank,  whether  existing  at the time of issuance of the Credit or
adopted  thereafter.  In the  case  of  sale  of a  participation  permitted  by
paragraph 16 hereof,  all amounts payable by the Applicant under this paragraph,
shall  be  determined  as if the  Bank  had not  sold  such  participation.  The
Applicant  acknowledges that there may be various methods of allocating costs to
the Credit and agrees that the Bank's allocation for purposes of determining the
cost referred to above  (including the cost of maintaining  capital  required in
connection  with the Credit) shall be conclusive and binding upon the Applicant,
provided such allocation is made in good faith. The Applicant also agrees to pay
all withholding, stamp and other taxes or duties imposed by any taxing authority
on  payments  under the  Credit and this  Agreement  and to  indemnify  the Bank
against all liabilities, costs, claims, and expenses resulting from any omission
to pay or delay in paying any such duty or tax.

4. Successors;  Bank's Honoring. The Bank may honor, as complying with the terms
of the Credit and of the  Application,  any drawing by, or  Instrument  or other
document  signed  or  issued  by,  a person  (or a  transferee  of such  person)
purporting to be an administrator,  executor,  trustee in bankruptcy,  debtor in
possession, assignee for the benefit of creditors,  liquidator,  receiver, other
legal  representative  or successor by operation of law of the party  authorized
under the Credit to draw  under the Credit or to sign or issue such  Instruments
or  other  documents;  provided,  that  any such  drawing,  Instrument  or other
document is otherwise in substantial compliance with the Credit.
<PAGE>
5.  Amendment,   Change,   Modification,   No  Waiver.  No  amendment,   change,
modification  or waiver to which the Bank has consented  shall be deemed to mean
that the Bank will consent or has consented to any other or  subsequent  request
to amend,  change,  modify or waive a term of the Credit.  The Bank shall not be
deemed to have  amended,  changed or modified  any term hereof or to have waived
any of its rights hereunder,  unless the Bank or its authorized agent shall have
consented to such  amendment,  change or  modification in writing or signed such
waiver.

6. U.C.P.; Agreements and Acknowledgments.

         A. The Uniform  Customs and Practice.  The Uniform Customs and Practice
shall be  binding  on the  Applicant  and the Bank  except  to the  extent it is
otherwise expressly agreed.

         B. Other Agreements and Acknowledgments.

            It is also agreed that:

            (1)   user(s) of the Credit shall not be deemed agents of the Bank;

            (2)   none  of  the  Bank,  its  affiliates,   subsidiaries  or  its
                  correspondents shall be responsible for, and the obligation of
                  the Applicant to pay the Bank under Section 2 hereof shall not
                  be  affected  by,  (i)  any  act,  error,  neglect,   default,
                  omission,  insolvency  or  failure in  business  of any of its
                  correspondents   or  (ii)  the   form,   validity,   accuracy,
                  sufficiency,  legal effect or genuineness of any Instrument or
                  other document presented under the Credit;

            (3)   any  action,  inaction  or omission on the part of the Bank or
                  any of its affiliates, subsidiaries or correspondents under or
                  in  connection  with the  Credit or the  related  Instruments,
                  documents or property, if in good faith, shall be binding upon
                  the  Applicant  and  shall  not  place  the  Bank or any  such
                  affiliate,  subsidiary or correspondent under any liability to
                  the Applicant or affect in any way whatsoever the  Applicant's
                  obligation  to pay the Bank  under  Section 2 hereof and in no
                  event  shall  the Bank or any such  affiliate,  subsidiary  or
                  correspondent  be  liable  for any  special  or  consequential
                  damages;

            (4)   the  Applicant  will  promptly  examine:  (i) the  copy of the
                  credit (and of any amendments thereof) sent to it by the Bank;
                  and (ii) all  instruments  and documents  delivered to it from
                  time to time,  and in the event of any claim of  noncompliance
                  with  Applicant's  instructions  or  other  irregularity,  the
                  Applicant will immediately notify the Bank thereof in writing,
                  the  Applicant  being  conclusively  deemed to have waived any
                  such  claim  against  the  Bank  and  any of  its  affiliates,
                  subsidiaries  and  correspondents  unless  notice  is given as
                  aforesaid;

            (5)   if the Credit states any condition (whether for information or
                  otherwise)  without specifying the document to be presented to
                  determine compliance therewith, the Bank may (but shall not be
                  obligated to) treat such condition as not stated and disregard
                  it for purposes of  determining  compliance  with the terms of
                  the Credit; and

            (6)   the Bank shall have no  obligation  to notify the Applicant of
                  discrepancies in any Instruments or other documents  presented
                  under the Credit and any such  notification  or request  for a
                  waiver of such discrepancies  shall not constitute a waiver of
                  such  discrepancies  by the Bank nor an agreement to notify or
                  seek a waiver of any future discrepancies.

7. Instructions;  No Liability.  Instructions whether given orally (in person or
by telephone),  in writing (by teletransmission or other means) or by electronic
means may be honored by the Bank when  received  from  anyone  purporting  to be
authorized to give such  instructions  for the Applicant.  Each oral instruction
shall be confirmed in writing by the person  giving such  instruction,  or other
authorized  officer,   but  the  Bank's   responsibility  with  respect  to  any
instruction shall not be affected by its failure to receive,  or the content of,
such confirmation.  The Bank shall have no responsibility to notify Applicant of
any  discrepancies   between  Applicant's  oral  instructions  and  its  written
confirmation,  and in the event of any such  discrepancy,  the oral  instruction
shall govern. The Bank shall be fully protected in, and shall incur no liability
to the Applicant for, acting upon any oral,  written or electronic  instructions
which  the Bank in good  faith  believes  to have been  given by any  authorized
person,  and in no event  shall  the Bank be liable  for  special,  indirect  or
consequential  damages.  The Bank may, at its option, use any means of verifying
any instructions received by it. The Bank also may, at its option, refuse to act
on any instruction or any part thereof, without incurring any responsibility for
any loss, liability or expense arising out of such refusal.

8.  Indemnification.  The  Applicant  agrees to indemnify  and hold harmless the
Bank, each affiliate and subsidiary of the Bank and the correspondents of any of
them, against any and all claims, losses, liabilities, damages, costs, penalties
and fines,  including  reasonable  counsel fees and allocated  costs of internal
counsel,  howsoever  arising from or in connection  with the Credit,  including,
without limitation,  any such claim,  liability,  damage, cost liability or fine
arising out of any transfer,  sale,  delivery,  surrender or  endorsement of any
document  at  any  time(s)  held  by the  Bank  or  any  of  its  affiliates  or
subsidiaries, or held for the account of any of them by any correspondent of any
of them,  or arising out of any action,  suit or  proceeding  for  injunctive or
other judicial or  administrative  relief or any other judicial or  governmental
order  and  affecting,  directly  or  indirectly,  the  Bank or such  affiliate,
subsidiary or correspondent.

9. Licenses. The Applicant will procure promptly any necessary import, export or
other  licenses  in  connection  with  the  Credit  and  any  property   shipped
thereunder,   and  will  comply  with  all  foreign  and  domestic  governmental
regulations in regard to the shipment of such property or the financing  thereof
and will furnish the Bank on its demand, with evidence thereof.

10. Pledge and Assignment of Security.

         A. Pledge and Grant of Security Interests.  As security for the payment
or  performance  of  (i)  any  and  all of the  Applicant's  obligations  and/or
liabilities  to  the  Bank  under  this  Agreement   (including  the  contingent
obligation  under  paragraph 11 to pay or deliver to the Bank the maximum amount
available under the Credit whether or not a drawing, claim or demand for payment
has  been  made  under  the  Credit)  and  (ii)  all  other  obligations  and/or
liabilities  of the  Applicant to the Bank,  absolute or  contingent,  due or to
become  due, or which are now or may at any  time(s)  hereafter  be owing by the
Applicant to the Bank, the Applicant hereby:

         (1)  pledges  and/or  grants  to the Bank a  continuing  lien  upon and
         assignment of all right,  title and interest of the Applicant in and to
         the  balance of every  deposit  account,  now or at any time  hereafter
         existing, or the Applicant with any office of the bank or any affiliate
         or subsidiary  thereof,  wherever located,  and any other claims of the
         Applicant against any office of the Bank or any affiliate or subsidiary
         thereof, and in and to all money, instruments,  securities,  documents,
         chattel paper,  demands,  precious  metals,  funds,  and all claims and
         demands and rights and interest therein of the Applicant, and in and to
         all  evidences  thereof,  which  have  been  or at any  time  shall  be
         delivered to or otherwise come into the possession,  custody or control
         of any office of the Bank or any  affiliate or subsidiary  thereof,  or
         into the  possession,  custody or control  of any  affiliate,  agent or
         correspondent  of any such entity for any  purpose,  whether or not for
         the  express  purpose  of being used by any such  entity as  collateral
         security  or for  safekeeping  and the  Bank  shall be  deemed  to have
         possession, custody or control of all such property actually in transit
         to, or set apart
<PAGE>
         for,  it or any of its  affiliates  or  subsidiaries  (or any of  their
         agents,  correspondents  or others  acting in their  behalf),  it being
         understood  that the  receipt at any time by such  entities  (or any of
         their agents,  correspondents,  or others acting in their  behalf),  of
         other security of whatever nature,  including cash, shall not be deemed
         a waiver of any of the Bank's rights or powers hereunder. The Applicant
         agrees that such  affiliates or  subsidiaries  shall be agent(s) of the
         Bank for the  purpose of  perfecting  a security  interest  in any such
         deposit accounts or other property; and

         (2) pledges  and/or  grants to the Bank a security  interest in any and
         all property the Applicant holds as security for the obligations of any
         party  related to the Credit,  and further,  subordinates  its right to
         payment from such  property  and the proceeds  thereof to the rights of
         the Bank,  until the bank is paid in full, and agrees that it will hold
         in trust for and promptly deliver to the Bank any payment received from
         such property or proceeds.

         B.  Additional  Rights of the Bank.  The Bank is authorized to take any
action  necessary  to protect  its  rights in the  security  provided  hereunder
(whether  or not a drawing,  claim or demand for payment has been made under the
Credit)  including but not limited to segregating all or any part of the balance
of any deposit  account  referred to in paragraph  10(A) or other security to be
applied to the Applicant's obligations to the Bank as provided in paragraph 11.

11. Events of Default; Obligations;  Remedies. Upon the occurrence of any of the
events described in this paragraph 11 (whether or not a drawing, claim or demand
for payment has been made under the  Credit) the  Applicant  agrees that (A) any
and all  obligations  and  liabilities of the Applicant to the Bank,  matured or
unmatured,  absolute or contingent,  whether now existing or hereafter  incurred
(including  the  obligations  hereunder),  shall  be due and  payable  forthwith
without  notice or demand and (B) the Bank may (i) charge,  debit and/or  setoff
against any account of the Applicant  maintained at any office of the Bank or at
any subsidiary or affiliate of the Bank (now or in the future,  whether  general
or  special,  time or  demand,  matured or  unmatured)  for the  maximum  amount
available  under  the  Credit  and also for any and all  other  obligations  and
liabilities  of the  Applicant  (and for those of each of its  subsidiaries  and
affiliates) to the Bank hereunder or otherwise,  matured or unmatured,  absolute
or contingent,  whether now existing or hereafter incurred, (ii) demand that the
Applicant, and the Applicant shall upon such demand, deliver, transfer or assign
to the Bank cash or other property of a value and character  satisfactory to the
Bank (together with executed  financing  statements in such form as the Bank may
reasonably  require) as security for all such obligations and liabilities and/or
(iii) liquidate any or all of the property pledged, assigned and/or in which the
Bank has been granted a security interest, and in each case, the Bank shall hold
such amounts,  proceeds and collateral as security for (or at the Bank's option,
make payment in satisfaction  of) the Applicant's  (and such  subsidiaries'  and
affiliates)  obligations  and  liabilities,  matured or  unmatured,  absolute or
contingent,  whether now existing or hereafter incurred,  hereunder or otherwise
to the Bank:

         (1) if there shall occur any material  adverse  change in the condition
         (financial  or  otherwise),  business,  operations  or prospects of the
         Applicant or any Third Party;

         (2) if any statement made, or any  information or report  furnished to,
         the Bank in connection with this Agreement  contained any  misstatement
         of a material  fact or  omitted  to state a  material  fact or any fact
         necessary  to make  any  statement  contained  therein  not  materially
         misleading;

         (3) the death or dissolution of the Applicant or any Third Party;

         (4) if any  obligation  and/or  liability of the Applicant or any Third
         Party shall not be paid or performed  when due, or any default or event
         of default (as such is defined  under any  agreement for the payment of
         money to  which  the  Applicant  or a Third  Party is a party)  remains
         uncured  after the cure period  provided in the related  agreement  has
         elapsed; or

         (5) if the Applicant or a Third Party shall become  insolvent  (however
         such  insolvency  may be evidenced or defined) or generally not be able
         to pay its debts as they become due, or make a general  assignment  for
         the benefit of  creditors,  or if the  Applicant or a Third Party shall
         suspend  the  transaction  of its  usual  business  or be  expelled  or
         suspended  from  any  exchange,  or if an  application  is  made by any
         judgment  creditor  of the  Applicant  or a Third  Party  for an  order
         directing the Bank to pay over money or to deliver other  property,  or
         if a petition in bankruptcy  shall be filed by or against the Applicant
         or a Third  party,  or if a petition  shall be filed by or against  the
         Applicant  or any  proceeding  shall be  instituted  by or against  the
         Applicant  or a Third  Party for any  relief  under any  bankruptcy  or
         insolvency  laws  or  any  law  relating  to  the  relief  of  debtors,
         readjustment   or   indebtedness,    reorganization,   composition   or
         extensions,  or if any  governmental  authority,  or any  court  at the
         instance of any  governmental  authority,  shall take possession of any
         substantial  part of the property of the  Applicant or a Third Party or
         shall assume control over the affairs or operations of the Applicant or
         a Third Party,  or if a receiver or custodian shall be appointed of, or
         a writ or order of  attachment or  garnishment  shall be issued or made
         against,  any of the  property  or assets of the  Applicant  or a Third
         Party or the Applicant or a Third Party shall represent that any of the
         foregoing has occurred or will occur;

         (6)  if a  temporary  restraining  order,  injunction  (preliminary  or
         permanent) or any similar order is issued in connection with the Credit
         or any Instrument or document  relating  thereto which order may apply,
         directly or indirectly, to the Bank; or

         (7) the Bank shall in good faith deem itself insecure at any time.

12.  Continuing  Rights and  Obligations.  The Bank's rights and liens hereunder
shall continue  unimpaired,  and the Applicant shall be and remain  obligated in
accordance  with the terms and provisions  hereof,  notwithstanding  the release
and/or  substitution of any property which may be held as security  hereunder at
any time,  or of any  rights or  interest  therein  or the  release of any Third
Party.  No delay,  extension of time,  renewal,  compromise or other  indulgence
which may occur or be  granted by the Bank  shall  impair  the Bank's  rights or
liens hereunder.

13.  Partnership  Applicants;  Multiple  Applicants,  Etc. If the Applicant is a
partnership,  its  obligation  hereunder  shall  continue  in force,  and apply,
notwithstanding  any  change  in the  membership  of such  partnership,  however
arising,  or the release of any partner from liability.  If more than one entity
and/or person signs this Agreement  whether as Order Party or Account Party, (i)
each of them shall be jointly and severally  liable  hereunder and all the terms
and provisions regarding liabilities,  obligations and property of such entities
and/or persons shall apply to any  liabilities,  obligations and property of any
and all of them and (ii) each of them hereby agrees that,  without  notice to or
further consent by the other, the liability of any Applicant  hereunder may from
time to time, in whole or in part, be renewed, extended,  modified,  released or
reduced by the Bank without  affecting or releasing in any way the  liability of
the other  Applicant.  The Applicant  waives any defense  whatsoever which might
constitute a defense available to, or discharge of, a surety or a guarantor.

14. Jurisdiction and Venue;  Service of Process;  Appointment of Agent;  Waiver;
Commencement  of Action.  The  Applicant  hereby  consents  to the  nonexclusive
jurisdiction  over the  person  of the  Applicant  of any court of record of the
State in which the branch of the Bank to which this  Agreement  is  addressed is
located or of the United States District Court for the  appropriate  District of
such State and agrees that such court shall be a proper  forum for any action or
suit  brought by the Bank.  Service of process in any action or suit arising out
of or in  connection  with this  Agreement  or the  Credit  may be made upon the
Applicant  by  mailing  a copy of the  summons  to the  Applicant  either at the
address  set  forth  in the  Application  or at  the  Applicant's  last  address
appearing in the Bank's records.  In addition,  if the Applicant is organized or
incorporated  in a  jurisdiction  outside  the  United  States of  America,  the
Applicant designates the Consul General or equivalent official of the country of
incorporation of the Applicant as the true and lawful agent and attorney-in-
<PAGE>
fact  of the  Applicant  for  receipt  of the  summons,  writs  and  notices  in
connection  with any such action or suit. No litigation in respect of any matter
arising under or in connection  with the Credit or this Agreement may be brought
by the Applicant against the Bank unless such litigation shall be commenced in a
court of  competent  jurisdiction  in the City of New  York,  State of New York,
within  one (1) year  after (i) the  expiration  date of the  Credit or (ii) the
alleged breach shall have purportedly occurred, whichever is earlier.

The Applicant also waives:

         (1) the right to trial by jury in the event of any  litigation to which
         the Bank and the Applicant are parties in respect of any matter arising
         under of in respect of the Credit or,  this  Agreement,  whether or not
         such litigation has been commenced in respect of the Credit (including,
         but not limited to, this  Agreement)  and whether or not other  persons
         are also parties thereto;

         (2) the right to interpose any claim,  setoff, or counterclaim,  of any
         nature  or  description  and any  defense  based  upon the  statute  of
         limitations, laches, waiver, estoppel or setoff, howsoever described.

         (3) any  immunity it or its  property  may now or  hereafter  have from
         suit,  jurisdiction  attachment (whether prior to judgment or in aid or
         execution), execution or other legal process;

         (4) any  claim  against  the Bank for consequential or special damages;
         and

         (5) notice of acceptance of this Agreement.

15.  Assignment  and  Applicable  Law. This Agreement may not be assigned by the
Applicant  without the prior written consent of the Bank. The Bank may assign or
sell  participations  in all or any  part of the  Credit  or this  Agreement  to
another entity and the Bank may disseminate credit  information  relating to the
Applicant in connection with any proposed participation.  This Agreement and all
rights,  obligations and liabilities arising hereunder shall be binding upon and
inure  to the  benefit  of the  Bank  and the  Applicant  and  their  respective
successors  and  permitted  assigns and shall be governed  by, and  construed in
accordance  with, the internal laws of the  jurisdiction  in which the branch of
the Bank to which this Agreement is addressed is located,  without  reference to
that jurisdiction's principles of conflicts of law, and to the extent that there
is any conflict  between  such laws and the Uniform  Customs and  Practice,  the
Uniform Customs and Practice shall control.

                                          Demand Deposit A/C #__________________

                                          THE  TERMS  AND  CONDITIONS  SET FORTH
                                          ABOVE  HAVE BEEN  READ AND ARE  HEREBY
                                          ACCEPTED AND MADE  APPLICABLE  TO THIS
                                          AGREEMENT AND THE CREDIT.

WE WARRANT THAT NO SHIPMENT
OR PAYMENT TO BE MADE IN
CONNECTION WITH THIS AGREEMENT                    Rent-A-Wreck of America, Inc.
IS IN VIOLATION OF UNITED STATES                  -----------------------------
TRADE, CURRENCY CONTROL OR                        (Order Party)
OTHER REGULATIONS.  WE FURTHER                    11460 Cronridge Drive, #120
WARRANT THAT THE AGREEMENT                        Owings Mills, MD 21116
BELOW HAS BEEN DULY AND VALIDLY                   -----------------------------
EXECUTED BY OR ON BEHALF OF THE                   (Address)
ACCOUNT PARTY.                                
                                                  /s/  Kenneth Blum, Jr.
                                                  -----------------------------
                                                  (Authorized Signature) (Title)

                                                  5/16/97
                                                  -----------------------------
                                                  (Date)