Craig W. Clausen
                                               Vice-President
                                               Middle Market Banking Group
                                               1411 Broadway-5th Floor
                                               New York, New York 10018
                                               (212) 391-7157
                                               (212) 391-7117 (Fax)


June 1, 1998

Mr. Kenneth Blum, Jr., President
Ms. Mitra Khosravi, Chief Financial Officer
Rent a Wreck of America, Inc.
11460 Cronridge Drive-Suite 120
Owings Mills, Maryland 21117

Dear Mr. Blum, Jr. and Ms. Khosravi,

The Chase Manhattan Bank ("Chase") is pleased to inform you that it has approved
your request to increase your current  $500,000.000  standby letter of credit up
to but not to  exceed  $1,000,000.00,  under the  terms  and  conditions  of the
Standby  or  Performance   Letter  of  Credit  Application  and  Agreement  (the
"Agreement")  dated June 3, 1997 and a First Amendment thereto (the "Amendment")
dated June 1, 1998.

The amendment  increasing your existing standby letter of credit will be issued,
once a duly signed copy of the "Amendment" is received, all terms and conditions
of the  "Amendment"  are fulfilled,  including but not limited to the receipt of
the increased standby letter of credit for $638,000.00 issued by The Bank N T of
Butterfield, LTD., in favor of Chase.

Yours truly,



Craig W. Clausen

cc:      Robert A Bova
<PAGE>
                  FIRST AMENDMENT (the "Amendment")  dated as of June 1, 1998 to
the STANDBY OR PERFORMANCE LETTER OF CREDIT APPLICATION AND AGREEMENT dated June
3, 1997 (the "AGREEMENT")  between  RENT-A-WRECK OF AMERICA,  INC., a California
corporation  (the  "Applicant") and THE CHASE MANHATTAN BANK, a New York banking
corporation (the "Bank").

                  WHEREAS,  the  Applicant  and  the  Bank  are  parties  to the
Agreement; and

                  WHEREAS,   the  parties  desire  to  amend  the  Agreement  as
hereinafter set forth;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual agreements herein contained, the parties hereto hereby agree as follows:

                  1. Definitions.  Except as otherwise stated, capitalized terms
defined in the  Agreement  and used  herein  without  definition  shall have the
respective meanings assigned to them in the Agreement.

                  2. Amendments to the Agreement.

                           (a)      Section 11, Events of Default; Obligations;
                                    Remedies is amended as follows:

                           (1)      by deleting  "$1,300,000"  in Section  11(9)
                                    and  substituting  therefor  "$2,000,000" as
                                    the amended Consolidated  Tangible Net Worth
                                    requirement;

                           (2)      by adding two  additional  Event Of Defaults
                                    as Section (12) and (13) which shall read:

                                    "(12) if the  Collateral  Pool is less  than
                                    $1,000,000   at  any  fiscal   quarter  end.
                                    ("Collateral  Pool""is defined as the sum of
                                    (a) the stated amount of the standby  letter
                                    of credit in favor of the Bank issued by The
                                    Bank  of  N  T  Butterfield,   LTD.  in  the
                                    original   stated  amount  of  $638,000  (as
                                    amended,  extended or supplemented from time
                                    to time,  the  "Back Up L/C") and (b) 50% of
                                    the Eligible  Receivables  of the  Applicant
                                    and  all  of its  wholly-owned  subsidiaries
                                    ("Borrowing Base"). Eligible Receivables are
                                    those receivables where no more than 90 days
                                    has  elapsed   from  invoice  date  and  are
                                    otherwise satisfactory to the Bank.)

                                    (13) if the  Borrowing  Base  is  less  than
                                    $362,000  at any  time,  provided,  however,
                                    that the  Applicant  shall  have 5  business
                                    days  after  notice by the Bank to  increase
                                    the stated  amount of the Back Up L/C 
<PAGE>
                                    by the amount of such  deficiency  (it being
                                    understood  that if the stated amount of the
                                    Back  Up  L/C  is so  increased,  it  cannot
                                    subsequently be reduced)."

                  3. Representations and Warranties. To induce the Bank to enter
into this First Amendment, the Applicant hereby represents and warrants that:

                  (a) It has the power,  authority  and legal  right to make and
         deliver this First Amendment and to perform its  obligations  under the
         Agreement,  as  modified by this First  Amendment,  without any notice,
         consent,  approval or authorization  not already  obtained,  and it has
         taken all necessary action to authorize the same.

                  (b) The making and  delivery of this First  Amendment  and the
         performance of the Agreement as modified by this First Amendment do not
         violate  any  provision  of its  charter or by-laws or other  corporate
         documents or result in the breach of or  constitute a default  under or
         require  any  consent  under  any  indenture  or  other   agreement  or
         instrument to which it is a party or by which it or any of its property
         may be bound or  affected.  The  Agreement  as  modified  by this First
         Amendment   constitutes  its  legal,   valid  and  binding   obligation
         enforceable  against it in  accordance  with its  terms,  except as the
         enforceability  thereof  may be limited by any  applicable  bankruptcy,
         reorganization,   insolvency,   moratorium  or  other  laws   affecting
         creditors' rights generally.

                  (c) No Event of Default  under the  Agreement has occurred and
         is  continuing  under  the  Agreement  as of the  date  of  this  First
         Amendment and after giving effect thereto.

                  4. Effective Date. This First Amendment shall become effective
as of the date hereof when the Bank shall have received (a) counterparts of this
First  Amendment  duly  executed  by  each  of the  parties  hereto  and (b) its
requisite administrative and legal processing fees.

                  5.  Counterparts.  This First  Amendment  may be signed in any
number of  counterparts,  each of which  shall be an  original  and all of which
taken together shall  constitute a single  instrument with the same effect as if
the signatures thereto and hereto were upon the same instrument.

                  6. Full Force and Effect.  Except as expressly amended by this
First Amendment,  all of the terms and provisions of the Agreement and any other
documents  executed in connection  therewith,  shall  continue in full force and
effect, are hereby ratified and confirmed in all respects, and all parties shall
be entitled to the benefits thereof.

                  7.  Governing Law. This First  Amendment  shall be governed by
and construed in accordance with the laws of the State of New York. 
                                       2
<PAGE>
                  IN WITNESS WHEREOF,  the parties hereto have caused this First
Amendment to be duly executive and delivered by their proper and duly authorized
officers as of the date set forth above.


RENT-A-WRECK OF AMERICA, INC.           THE CHASE MANHATTAN BANK


By:/s/ Mitra GH Khosravi                By:/s/ Craig Clausen
   ---------------------------------       -------------------------------------
   Title: Chief Accounting Officer         Title: Vice President

By:/s/ Lori Sheffron
   ---------------------------------
   Title: Vice President
                                       3
<PAGE>
                                                               L/C No.: P-384861
Global Trade Services Group                              AMENDMENT NO: 2
P.O. Box 44 Church Street Station
New York, NY 10008-0044

Cable Address: CHAMANBANK New York

        Advising Bank                                      APPLICANT:
************DIRECT ************                 CONSOLIDATED AMERICAN RENTAL
                                                INSURANCE CO., LTD.
                                                11460 CRONRIDGE DRIVE, SUITE 120
                                                OWINGS MILLS, MARYLAND 21117


        Beneficiary
NATIONAL UNION FIRE INSURANCE CO.
OF PITTSBURGH, PA
70 PINE ST.  4TH FLOOR NY, NY 10270
ATTN:  ART STILLWELL


IN ACCORDANCE WITH INSTRUCTIONS RECEIVED, THE ABOVE-REFERENCED  LETTER OF CREDIT
HAS BEEN AMENDED AS FOLLOWS:

         1 -      LETTER OF CREDIT AMOUNT IS INCREASED BY USD  500,000.00  (FIVE
                  HUNDRED THOUSAND AND 00/100 UNITED STATES DOLLARS).

                  THE  AGGREGATE  AMOUNT  AVAILABLE  UNDER THIS LETTER OF CREDIT
                  SHALL NOT EXCEED USD 1,000,000.00.

ALL OTHER TERMS AND CONDITIONS OF THE CREDIT REMAIN UNCHANGED.



P-384861-  -009-A1-01-                                 /S/ ELSIE VEGA
                                              ----------------------------------
                                              AUTHORIZED SIGNATURE
                                                              ELSIE VEGA
<PAGE>
                           BANK OF N.T. BUTTERFIELD & SON LTD

                                                                        OUTGOING
                                                                    WIRE MESSAGE

TO: CHASE MANHATTAN BANK, N.A.
    NEW YORK

ATTENTION: STANDBY LETTER OF CREDIT DEPT.

KINDLY ADVISE THE FOLLOWING AMENDMENT WITHOUT ADDING YOUR ENGAGEMENT TO YOUR:-

CHASE MANHATTAN BANK
380 MADISON AVENUE
GROUND FLOOR
NEW YORK, N.Y. 10017
ATTN:  CRAIG CLAUSEN

YOUR REFERENCE:  P386812

OUR REFERENCE: IRREVOCABLE LETTER OF CREDIT NO. G13163

WE HEREBY AMEND OUR IRREVOCABLE LETTER OF CREDIT NO. G13163 AS FOLLOWS:-

LETTER OF CREDIT IS  INCREASED  BY  USD388,000.00  UP TO A MAXIMUM  LIABILITY OF
USD638,000.00 (SIX HUNDRED AND THIRTY EIGHT THOUSAND UNITED STATES DOLLARS)

ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME.

THESE ARE THE OPERATIVE INSTRUCTIONS AS PER I.C.C. PUBLICATION NO. 500.

KINDLY ADVISE BENEFICIARY URGENTLY ATTN: CRAIG W. CLAUSEN

REGARDS,
SABRINA CHARLTON
LETTERS OF CREDIT DEPT.

# 13163
CUSTOMER CONSOLIDATED AMERICAN RENTAL INS. CO.                          06/01/98
<PAGE>
The Chase Manhattan Bank
                                      Chase                          Corporate
                                                                     Resolutions
                              CORPORATE RESOLUTIONS

I, the undersigned  Secretary,  hereby certify to The Chase Manhattan Bank, that
at a  meeting  of the  Board  of  Directors  of Rent A Wreck  of  America,  Inc.
("Corporation")  a  corporation   organized  and  existing  under  the  laws  of
California  duly called and duly held on the 3 day of June,  1998, the following
Resolutions  were duly adopted,  and that the said Resolutions have been entered
upon the regular  minute books of the  Corporation,  are in accordance  with the
By-Laws and are now in full force and effect.

RESOLVED:

1.       The  Officers of  Corporation,  or any one or more of them,  are hereby
         authorized  to open a bank  account or accounts  from time to time with
         The Chase  Manhattan Bank and its  subsidiaries  and  affiliates  (each
         being  hereinafter  referred  to as  "Bank")  for  and in the  name  of
         Corporation with such title or titles as he or they may designate.

2.       The             Mitro GS Khosrav, (CAO), Lori Shaffron (VP)

         of Corporation, signing       Mitro GS Khosrav, Lori Shaffron (anything
         more than $500.00 (two).

         and their successors ("Authorized  Person(s)") are hereby authorized to
         sign, by hand or by facsimile (including,  but not limited to, computer
         generated)   signature(s),   checks,  drafts,   acceptances  and  other
         instruments  (hereinafter each collectively  referred to as "Item(s)").
         Notwithstanding  the above, any Authorized  Person is authorized singly
         to: (1) initiate  Automated  Clearing  House ("ACH")  debits  without a
         signature;  (2) initiate payments by use of Depository  Transfer Checks
         ("DTC") without a signature other than the name of Corporation  printed
         on the DTC; or (3) give  instructions,  by means other than the signing
         of an Item, with respect to any account transaction, including, but not
         limited  to, the  payment,  transfer  or  withdrawal  of funds by wire,
         computer or other electronic means, or otherwise, or of money, credits,
         items or property  at any time held by Bank for account of  Corporation
         ("Instructions").

3.       Bank is hereby  authorized  to honor and pay Items,  whether  signed by
         hand  or  by  facsimile  (including,   but  not  limited  to,  computer
         generated) signature(s).  In the case of facsimile signatures,  Bank is
         authorized  to pay any Item if the  signature,  regardless of how or by
         whom  affixed,  and whether or not the form of  signature  used on such
         Item  was  actually  prepared  by or  for  Corporation,  resembles  the
         specimens filed with Bank by Corporation. Bank is further authorized to
         honor and pay DTCs, ACHs,  Instructions,  and other orders given singly
         by any Authorized Person, including such as may bring about or increase
         an  overdraft  and such as may be payable to or for the  benefit of any
         Authorized  Person or other Officer or employee  individually,  without
         inquiry as to the  circumstances  of the issuance or the disposition of
         the proceeds thereof and without limit as to amount.

4.       Bank is hereby  authorized  to accept for deposit,  for credit,  or for
         collection,  or otherwise,  Items endorsed by any person or by stamp or
         other  impression in the name of Corporation  without inquiry as to the
         circumstances of the endorsement or any lack of endorsement or any lack
         or the disposition of the proceeds.

5.       Any one of the Authorized Person(s) of Corporation is hereby authorized
         to secure from Bank one or more Chase  Business  Banking  Card(s)  (the
         "Card(s)") on behalf of Corporation which may be used by any cardholder
         named  by  such  Authorized   Person(s)  to  initiate  electronic  fund
         transactions as described in the Chase Business  Banking Card Agreement
         (the  "Agreement")  with  respect  to any  and  all  such  accounts  of
         Corporation as Corporation or such Authorized  Person(s) may designate,
         including  without  limitation,  transfers  from  business  credit line
         accounts.  Such  Authorized  Person(s)  be, and each of them hereby is,
         further  authorized to execute and deliver in the name and on behalf of
         Corporation  an Agreement and  supporting  documentation  governing the
         issuance  and use of such  Cards  with  such  changes,  if any,  as the
         Authorized Person(s) executing the same shall approve, and to otherwise
         conduct any business whatsoever relative to the account(s) and Cards as
         may be necessary or advisable in order to carry out the full intent and
         purposes of said Agreement and of these resolutions.



         -----------------------------------------------------------------------
               (Indicate account numbers to be accessed by Card)
                                                                     Page 1 of 3
<PAGE>
6.       The                               N/A

         of Corporation,  and each of them, and their successors in office,  and
         any other  person  hereafter  authorized  on behalf of  Corporation  to
         possess  a Card  ACTING  ALONE,  may  exercise  all of the  rights  and
         privileges  of  Corporation  with regard to any  account  linked to the
         Card.

7.       The            Ken Blum, Jr. (President), Mitro GS Khosrav (CAO)
         of Corporation, signing                  singly

         are hereby authorized to effect loans and advances and obtain credit at
         any  time for  Corporation  from  Bank  (and  guarantee  on  behalf  of
         Corporation the  obligations of others to Bank),  secured or unsecured,
         and for such loans and  advances  and credit  and  guarantees  to make,
         execute and deliver  promissory notes and other written  obligations or
         evidence of indebtedness of  Corporation,  applications  for letters of
         credit,  instruments  of guarantee and indemnity and any  agreements or
         undertakings,   general  or  specific,  with  respect  to  any  of  the
         foregoing,  and  as  security  for  the  payment  of  loans,  advances,
         indebtedness,  guarantees  and  liabilities  of,  or  credit  given to,
         Corporation  or  others  to  pledge,  hypothecate,   mortgage,  assign,
         transfer,  grant  liens and  security  interests  in,  give rights with
         respect to, endorse and deliver  property of any  description,  real or
         personal,  and any interest  therein and evidence of any thereof at any
         time held by  Corporation,  and to execute  mortgages,  deeds of trust,
         security  agreements,  instruments  of transfer,  assignment or pledge,
         powers of attorney and other  agreements  or  instruments  which may be
         necessary or desirable in connection therewith; and also to sell to, or
         discount  with  Bank,  commercial  paper,  bills  receivable,  accounts
         receivable,  stocks,  bonds or any other  securities or property at any
         time held by Corporation,  and to that end to endorse, assign, transfer
         and deliver the same; to execute and deliver  instruments or agreements
         of subordination  and assignment  satisfactory to Bank and also to give
         any  orders or  consents  for the  delivery,  sale,  exchange  or other
         disposition  of any  property or interest  therein or evidence  thereof
         belonging to Corporation  and at any time in hands of Bank,  whether as
         collateral  or  otherwise;  and  to  execute  and  deliver  such  other
         agreements,  instruments  and  documents  and to do such other acts and
         things  as may be  necessary  or  desirable  or  required  by  Bank  in
         connection  with any of the foregoing and Bank is hereby  authorized to
         honor, accept and execute any of the transactions described above.

8.       All loans,  discounts  and  advances  heretofore  obtained on behalf of
         Corporation and all notes and other obligations or evidences thereof of
         Corporation held by Bank are hereby approved, ratified, and confirmed.

9.       Corporation  does hereby give to Bank a continuing  lien for the amount
         of any and all  liabilities  and obligations of Corporation to Bank and
         claims of every nature and  description  of Bank  against  Corporation,
         whether now existing or hereafter incurred,  originally contracted with
         Bank and/or  with  another or others and now or  hereafter  owing to or
         acquired in any manner by Bank, whether contracted by Corporation alone
         or  jointly  and/or  severally  with  another or  others,  absolute  or
         contingent, secured or unsecured, matured or unmatured upon any and all
         moneys,  securities and any and all other  property of Corporation  and
         the proceeds thereof,  now of hereafter actually or constructively held
         or  received  by or in  transit  in any  manner  to or from  Bank,  its
         correspondents   or  agents  from  or  for  Corporation,   whether  for
         safekeeping,  custody,  pledge,  transmission,  collection or otherwise
         coming into the possession of Bank in any way.

10.      In case of conflicting  claims or disputes,  or doubt on Bank's part as
         to the validity, extent, modification, revocation or exercise of any of
         the  authorities  herein  contained Bank may but need not recognize nor
         give any  effect  to any  notice  from any  Officer,  or from any other
         person,   purporting  to  cancel,   restrict  or  change  any  of  said
         authorities,  or the exercise thereof, unless Bank is required to do so
         by the judgment,  decree or order of a court having jurisdiction of the
         subject  matter  and of the  parties  to  such  conflicting  claims  or
         disputes.

11.      Corporation agrees to be bound by the Terms and Conditions for Business
         Accounts and Services, currently in effect and as amended hereafter, as
         well  as any  signature  card,  deposit  ticket,  checkbook,  passbook,
         statement of account, receipt instrument, document or other agreements,
         such as but not limited to,  funds  transfer  agreements,  delivered or
         made  available to  Corporation  from Bank and by all notices posted at
         the office of Bank at which the account of  Corporation  is maintained,
         in each case with the same  effect  as if each and every  term  thereof
         were set forth in full herein and made a part hereof.

12.      The  Officers  of  Corporation  or any one or more of them  are  hereby
         authorized to act for Corporation in all other matters and transactions
         relating to any of its business  with Bank  including,  but not limited
         to, the execution and delivery of any agreements or contracts necessary
         to effect the foregoing Resolutions.
                                                                     Page 1 of 2
<PAGE>
13.      Bank is hereby  released from any  liability  and shall be  indemnified
         against any loss,  liability or expense  arising  from  honoring any of
         these Resolutions.

14.      Subject to paragraph 10 above,  each of the foregoing  Resolutions  and
         the authority  thereby  conferred shall remain in full force and effect
         until written notice of revocation or  modification  by presentation of
         new  Corporate  Resolutions  and  signature  cards shall be received by
         Bank;  provided that such notice shall not be effective with respect to
         any revocation or  modification  of said  authorities  until Bank shall
         have had a reasonable  opportunity to act thereon  following receipt of
         such notice or with respect to any checks or other  instruments for the
         payment of money or the  withdrawal  of funds  dated on or prior to the
         date of such  notice,  but  presented to Bank after the receipt of such
         notice.  The Secretary or any Assistant  Secretary or any other Officer
         of Corporation is hereby authorized and directed to certify,  under the
         seal of Corporation or not, but with like effect in the latter case, to
         Bank the  foregoing  Resolutions,  the names of the  Officers and other
         representatives of Corporation and any changes from time to time in the
         said Officers and  representatives  and  specimens of their  respective
         signatures.  Bank may  conclusively  assume  that  persons  at any time
         certified to it to be Officers or others representatives of Corporation
         continue  as  such  until  receipt  by Bank of  written  notice  to the
         contrary.

I FURTHER CERTIFY that the persons herein  designated as Officers of Corporation
have been duly elected to and now hold the offices in  Corporation  set opposite
their  respective  names  and that the  following  are the  authentic,  official
signatures of the said respective  Officers and of the named signatories who are
not Corporate Officers, to wit:

<TABLE>
<CAPTION>
Name (Typewritten or Printed)            Office                 Signatures
-----------------------------            ------                 ----------

<S>                                      <C>                    <C>                                <C>
Ken Blum, Jr.                            President              /s/ Ken Blum, Jr.                  cac
-----------------------------                                   --------------------------------------

Lori Shaffron                            Vice-President         /s/ Lori Shaffron                  cac
-----------------------------                                   --------------------------------------

Ken Blum, Jr.                            Secretary              /s/ Ken Blum, Jr.                  cac
-----------------------------                                   --------------------------------------

                                         Treasurer
-----------------------------                                   --------------------------------------

Mitro GS Khosrav                         CAO                    /s/ Mitro GS Khosrav               cac
-----------------------------                                   --------------------------------------
</TABLE>


IN WITNESS  WHEREOF,  I have  hereunto set my hand as Secretary  and affixed the
seal of the said Corporation this 2 day of June, 1998,


<TABLE>
<S>                                                             <C>
*Attest (Second Officer)                                        /s/ Ken Blum, Jr.                  cac
                                                                --------------------------------------
                                                                Secretary
</TABLE>

Mitro GS Khosrav                        cac
-----------------------------
Signature

CAO
-----------------------------
Title


     AFFIX
(CORPORATE SEAL)
     HERE



*Note:      In  case  the   Secretary  is   authorized  to  sign  by  the  above
            Resolutions, this certificate should be attested by a second Officer
            of Corporation.