<PAGE>

Arthur C. Kellar                               Desarollo Integrado, S.A. de C.V.
106 Ebbtide Drive                              Blvd. Diaz Ordaz #200
North Palm Beach, Florida  33408               Col. Santa Maria
                                               Monterrey, N.L.
                                               Mexico
                                               CP 64650


                                August 3, 2000



Precision Auto Care, Inc.
748 Miller Drive, S.E.
Leesburg, Virginia  20175
Attn;  Woodley A. Allen
       Chairman of the Board of Directors

RE: $11,250,000 Credit Facilities to Precision Auto Care, Inc.

Dear Woody:

     You have requested that Arthur Kellar and Desarrollo Integrado, S.A. de
C.V., each participating at 50% through an entity created, owned and controlled
by them (the "Lender"), consider a financing arrangement for Precision Auto
Care, Inc. ("PAC") to refinance existing debt and provide for the Borrower's
ongoing working capital needs. In connection therewith, and subject to and upon
the terms and conditions hereinafter set forth, we are pleased to inform you of
our commitment to make available to the Borrower to a total credit facility of
$11,250,000 ("Credit Facility") (it being understood that Arthur Kellar and
Desarrollo Integrado S.A. de C.V. shall each be responsible for making
$5,625,000 of the Credit Facility available through the Lender).

     1.  Borrower:  Precision Auto Care, Inc., its US subsidiaries and its
         --------
         foreign subsidiaries, all jointly and severally, except to the extent
         that the liability of the Borrower's Mexican subsidiaries would create
         a deemed dividend to the Borrower for U.S. tax purposes, in which case
         their liability will be appropriately limited.

     2.  Revolving Credit Facility:  The Lender agrees to provide to the
         -------------------------
         Borrower a three-year revolving credit facility with a minimum capacity
         of United States Eleven Million Two Hundred and Fifty Thousand Dollars
         (U.S. $11,250,000) at any one time outstanding (it being understood
         that Arthur Kellar and Desarrollo Integrado S.A. de C.V. shall each be
         responsible for making $5,625,000 of the Credit Facility available
         through the Lender).

     3.  Use of Proceeds:  The facility will be available to purchase the
         ---------------
         promissory note and related financing documents pursuant to which the
         existing working capital and acquisition lines of credit were made
         available to the Borrower by First Union National
<PAGE>

Woodley A. Allen
August 3, 2000
Page 2

         Bank ("First Union"), which have an aggregate outstanding principal
         balance of approximately $7,300,000 as of the date of this letter, plus
         accrued interest. Following the refinancing, the entire amount of the
         Lender's Revolving Credit Facility will be available to finance the
         Borrower's working capital needs. Prior to refinancing the Borrower's
         outstanding lines of credit with First Union, the Lender may make
         available to the Borrower up to $2,500,000 to pay the Borrower's
         payroll, payroll taxes, debt service obligations and other immediate
         needs (the "Bridge Loan").

     4.  Structure:  The Lender's Revolving Credit Facility will be structured
         ---------
         as an amendment and restatement of the First Union financing. Revised
         terms will include: (a) an increase in the amount available under the
         working capital line of credit; (b) the elimination of the acquisition
         line of credit and the principal amortization requirements with respect
         thereto, such that the entire principal balance of the Lender's
         Revolving Credit Facility will be due and payable at maturity, subject
         to the Mandatory Prepayment Terms described below; (c) an increase in
         the applicable per annum interest rate from LIBOR plus 4.75% to an
                        ---------
         established fixed rate of 12% per annum; (d) the assignment of all
                                       ---------
         collateral securing the First Union financing, including a lien on all
         unencumbered real property owned by the Borrower, a pledge of stock in
         PAC's subsidiaries and a security interest in the Borrower's Accounts,
         Inventory, Chattel Paper, Documents, General Intangibles, Instruments,
         Equipment, Securities and Records pertaining to all of the above (as
         such terms are defined in the Uniform Commercial Code); and (e) the
         elimination of all financial covenants and appropriate modifications to
         certain negative covenants as necessary or appropriate to reflect the
         Lender's status as a non-institutional lender.

         In the event a Bridge Loan is extended by the Lender prior to the time
         the First Union financing has been amended and restated, the
         obligation of the Borrower to repay the principal amount of the Bridge
         Loan, plus interest thereon at 12% per annum, shall be evidenced by a
                                            --- -----
         Subordinated Debenture or Demand Note containing the subordination
         language previously approved by First Union.  Such note will be
         cancelled at such time as all amounts due thereunder are included in
         the balance due and outstanding under the Lender's Revolving Credit
         Facility.

         In no event shall amounts outstanding under the Lender's Revolving
         Credit Facility and the Bridge Loan exceed the Lender's total
         commitment of U.S. $11,250,000.

     5.  Maturity:  The Lender's Revolving Credit Facility shall mature on
         --------
         September 1, 2003.

     6.  Optional Prepayment:  The Borrower may, at its option, prepay the
         -------------------
         Lender's Revolving Credit Facility in whole or in part, at any time
         without premium or penalty.
<PAGE>

Woodley A. Allen
August 3, 2000
Page 3

     7.  Mandatory Prepayment:  The Borrower will be required to prepay the
         --------------------
         Lender's Revolving Credit Facility from the net cash proceeds generated
         by any sale of the Company's businesses and assets unless the Lender
         waives in writing the right to receive proceeds.

     8.  Financing Fee:  At the time of closing on the Lender's Revolving
         -------------
         Credit Facility there shall be a financing fee payable by the Borrower
         to the Lender in the form of warrants to purchase 2,000,000 shares of
         PAC's common stock at a price per share equal to 125% of the closing
         price for the PAC common stock reported at the close of business on the
         day prior to the date on which this letter is executed and delivered by
         the parties. The Lender understands that the issuance of warrants may
         be subject to the approval of PAC's stockholders if PAC determines it
         is advisable to seek such approval in order to comply with applicable
         NASDAQ listing requirements. IF PAC determines to seek their approval
         this will be requested as soon as practicable following closing on the
         Lender's Revolving Credit Facility. In the event that shareholder
         approval is sought and not obtained, the Lender and the Borrower agree
         to negotiate some form of mutually acceptable alternative compensation
         of equivalent value.

     9.  Conditions Precedent:  The Lender's obligation to provide the Revolving
         --------------------
         Credit Facility shall be subject to the fulfillment of the following
         conditions:

         A.  The execution and delivery, in form and substance acceptable to the
             Lender and its counsel, of the documents necessary or appropriate
             to accomplish the foregoing transactions.

         B.  The execution by Louis M. Brown of an Employment Agreement with PAC
             pursuant to which he will agree to (i) serve as PAC's president and
             chief executive officer beginning August 4, 2000, and (ii) purchase
             up to 1,700,000 shares of PAC's common stock for U.S. $750,000.

     10. Miscellaneous:

         A.  This commitment may not be assigned or in any way transferred by
             the Borrower without the prior written approval of the Lender.

         B.  This commitment shall be governed by and construed under the laws
             of the Commonwealth of Virginia. The Revolving Credit Facility
             shall be governed by and construed under the laws of the
             Commonwealth of Virginia.

         C.  This letter supersedes in all respects any other written and oral
             communications prior to the date hereof regarding the financing
             transaction contemplated by this letter.
<PAGE>

Woodley A. Allen
August 3, 2000
Page 4

          D.   If the foregoing is satisfactory, kindly indicate your acceptance
               by signing the enclosed copy of this letter and returning one
               fully executed letter to the Lender, by the close of business on
               the fifth business day following the date of its issuance. This
               commitment shall expire on October 5, 2000 unless the Lender's
               Revolving Credit Facility has closed before that date.

                                    Yours truly,



                                    /s/ Arthur C. Kellar
                                    --------------------
                                    Arthur C. Kellar



                                    Desarrollo Integrado, S.A. de C.V.



                                    By: /s/ Mauricio Zambrano
                                        ---------------------
                                       Name:  Mauricio Zambrano
                                       Title: Managing Director


The foregoing commitment is hereby accepted by the Borrower this 3rd day of
August, 2000.


Precision Auto Care, Inc.


By: /s/ Woodley A. Allen
    --------------------
    Name: Woodley A. Allen
    Title: Chairman of the Board of Directors