Document:

Bank of America                                              Customer# 41-565672
                                                                Date: March 2000

                               Security Agreement

Bank/Secured Party:                            Debtor(s)/Pledgor(s):

Bank of America, N.A.                          Rent-A-Wreck of America, Inc.
Banking Center:                                10324 South Dolfield Drive
         10 Light Street                       Owings Mills, Maryland 21117
         Baltimore, Maryland 21202
                                                        County: Baltimore County
         County:  Baltimore City
================================================================================
Debtor/Pledgor is: Corporation
Address is Debtor's: Place of Business
Collateral (hereinafter defined) is located at: Debtor's address shown above.

1.  Security  Interest.  For good and  valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged,  Debtor/Pledgor (hereinafter referred
to as "Debtor")  assigns and grants to Bank (also known as "Secured  Party"),  a
security interest and lien in the Collateral (hereinafter defined) to secure the
payment and the performance of the Obligation (hereinafter defined).

2.  Collateral.  A security  interest  is granted  in the  following  collateral
described in this Item 2 (the "Collateral"):

     A. Types of Collateral

          Accounts:  Any and all  accounts  and  other  rights  of Debtor to the
payment for goods sold or leased or for services  rendered whether or not earned
by performance,  including,  without  limitation,  contract rights,  book debts,
checks, notes, drafts, instruments,  chattel paper, acceptances, and any and all
amounts  due to  Debtor  from  a  factor  or  other  forms  of  obligations  and
receivables, now existing or hereafter arising.

     B.  Substitutions,  Proceeds and Related Items. Any and all substitutes and
replacements for,  accessions,  attachments and other additions to, tools, parts
and equipment now or hereafter added to or used in connection with, and all cash

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
or  non-cash  proceeds  and  products  of, the  Collateral  (including,  without
limitation,   all  income,   benefits  and  property  receivable,   received  or
distributed which results from any of the Collateral,  such as dividends payable
or distributable in cash, property or stock; insurance distributions of any kind
related to the Collateral,  including,  without  limitation,  returned premiums,
interest,  premium and principal payments;  redemption proceeds and subscription
rights;  and shares or other proceeds of conversions or splits of any securities
in the Collateral); any and all choses in action and causes of action of Debtor,
whether now existing or hereafter  arising,  relating  directly or indirectly to
the Collateral  (whether  arising in contract,  tort or otherwise and whether or
not  currently  in  litigation);   all  certificates  of  title,  manufacturer's
statements of origin,  other documents,  accounts and chattel paper, whether now
existing or  hereafter  arising  directly or  indirectly  from or related to the
Collateral;  all  warranties,  wrapping,  packaging,  advertising  and  shipping
materials  used or to be used in connection  with or related to the  Collateral;
all of  Debtor's  books,  records,  data,  plans,  manuals,  computer  software,
computer tapes,  computer systems,  computer disks,  computer  programs,  source
codes and object  codes  containing  any  information,  pertaining  directly  or
indirectly to the Collateral and all rights of Debtor to retrieve data and other
information  pertaining  directly or  indirectly  to the  Collateral  from third
parties,  whether now existing or hereafter arising; and all returned,  refused,
stopped in transit,  or  repossessed  Collateral,  any of which,  if received by
Debtor, upon request shall be delivered immediately to Bank.

     C. Balances and Other  Property.  The balance of every  deposit  account of
Debtor  maintained  with Bank and any other claim of Debtor against Bank, now or
hereafter  existing,  liquidated or  unliquidated,  and all money,  instruments,
securities,  documents, chattel paper, credits, claims, demands, income, and any
other property, rights and interests of Debtor which at any time shall come into
the  possession  or custody or under the control of Bank or any of its agents or
affiliates  for any  purpose,  and the  proceeds of any  thereof.  Bank shall be
deemed to have  possession  of any of the  Collateral in transit to or set apart
for it or any of its agents or affiliates.

3.  Description of  Obligation(s).  The following  obligations  ("Obligation" or
"Obligations")  are  secured  by this  Agreement:  (a) All  debts,  obligations,
liabilities and agreements of Debtor to Bank, now or hereafter existing, arising

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
directly or indirectly  between Debtor and Bank whether  absolute or contingent,
joint or several, secured or unsecured, due or not due, contractual or tortious,
liquidated or  unliquidated,  arising by operation of law or otherwise,  and all
renewals,  extensions  or  rearrangement  of any of the  above;  (b)  All  costs
incurred by Bank to obtain,  preserve,  perfect and enforce this  Agreement  and
maintain,  preserve,  collect and  realize  upon the  Collateral;  (c) All debt,
obligations  and  liabilities  of  Rent-A-Wreck  One Way,  Inc.;  Bundy American
Corporation;  Rent-A-Wreck  Leasinq,  Inc.; PRICELESS  Rent-A-Car,  Inc.; and/or
Consolidated  American  Rental  Insurance  Company,  LTD to  Bank  of the  kinds
described  in this item 3., now  existing or  hereafter  arising;  (d) All other
costs and  attorney's  fees  incurred by Bank,  for which Debtor is obligated to
reimburse Bank in accordance  with the terms of the Loan Documents  (hereinafter
defined), together with interest at the maximum rate allowed by law, or if none,
25% per annum;  and (e) All  amounts  which may be owed to Bank  pursuant to all
other Loan Documents  executed  between Bank and any other Debtor.  If Debtor is
not the obligor of the  Obligation,  and in the event any amount paid to Bank on
any  Obligation  is  subsequently  recovered  from Bank in or as a result of any
bankruptcy,  insolvency or  fraudulent  conveyance  proceeding,  Debtor shall be
liable to Bank for the amounts so  recovered  up to the fair market value of the
Collateral  whether or not the  Collateral  has been  released  or the  security
interest  terminated.  In the  event the  Collateral  has been  released  or the
security interest  terminated,  the fair market value of the Collateral shall be
determined,  at Bank's option,  as of the date the Collateral was released,  the
security interest terminated, or said amounts were recovered.

4.  Debtor's  Warranties.  Debtor  hereby  represents  and  warrants  to Bank as
follows:

     A. Financing Statements. Except as may be noted by schedule attached hereto
and  incorporated  herein by  reference,  no  financing  statement  covering the
Collateral  is or will be on file in any public  office,  except  the  financing
statements relating to this security interest,  and no security interest,  other
than the one herein created, has attached or been perfected in the Collateral or
any part thereof.

     B. Ownership. Debtor owns, or will use the proceeds of any loans by Bank to
become the owner of, the Collateral  free from any setoff,  claim,  restriction,

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
lien,  security  interest or encumbrance  except liens for taxes not yet due and
the security interest hereunder.

     C.  Fixtures  and  Accessions.  None of the  Collateral  is affixed to real
estate or is an accession to any goods,  or will become a fixture or  accession,
except as expressly set out herein.

     D.  Claims of Debtors on the  Collateral.  All  account  debtors  and other
obligors whose debts or obligations  are part of the Collateral have no right to
setoffs, counterclaims or adjustments, and no defenses in connection therewith.

     E. Environmental  Compliance.  The conduct of Debtor's business  operations
and the condition of Debtor's property does not and will not violate any federal
laws,  rules or ordinances  for  environmental  protection,  regulations  of the
Environmental  Protection  Agency and any  applicable  local or state law, rule,
regulation  or  rule of  common  law and  any  judicial  interpretation  thereof
relating  primarily to the  environment  or any  materials  defined as hazardous
materials or substances under any local,  state or federal  environmental  laws,
rules or  regulations,  and  petroleum,  petroleum  products,  oil and  asbestos
("Hazardous Materials").

     F. Power and  Authority.  Debtor has full power and  authority to make this
Agreement,  and all necessary  consents and approvals of any persons,  entities,
governmental  or  regulatory  authorities  and  securities  exchanges  have been
obtained to effectuate the validity of this Agreement.

5.  Debtor's  Covenants.  Until  full  payment  and  performance  of  all of the
Obligation and termination or expiration of any obligation or commitment of Bank
to make advances or loans to Debtor, unless Bank otherwise consents in writing:

     A.  Obligation  and  This  Agreement.  Debtor  shall  perform  all  of  its
agreements herein and in any other agreements between it and Bank.

     B.  Ownership  and  Maintenance  of the  Collateral.  Debtor shall keep all
tangible  Collateral  in good  condition.  Debtor  shall  defend the  Collateral
against all claims and demands of all persons at any time  claiming any interest
therein  adverse to Bank.  Debtor shall keep the Collateral  free from all liens

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
and  security  interests  except  those for  taxes not yet due and the  security
interest hereby created.

     C. Insurance.  Debtor shall insure the Collateral with companies acceptable
to Bank.  Such  insurance  shall be in an amount  not less than the fair  market
value of the  Collateral  and  shall  be  against  such  casualties,  with  such
deductible  amounts as Bank  shall  approve.  All  insurance  policies  shall be
written  for the  benefit  of Debtor  and Bank as their  interests  may  appear,
payable to Bank as loss payee,  or in other form  satisfactory to Bank, and such
policies or  certificates  evidencing  the same shall be furnished to Bank.  All
policies of insurance  shall provide for written  notice to Bank at least thirty
(30) days  prior to  cancellation.  Risk of loss or damage  is  Debtor's  to the
extent of any deficiency in any effective insurance coverage.

     D. Bank's Costs. Debtor shall pay all costs necessary to obtain,  preserve,
perfect,  defend and enforce the security  interest  created by this  Agreement,
collect  the  Obligation,   and  preserve,   defend,  enforce  and  collect  the
Collateral, including but not limited to taxes, assessments, insurance premiums,
repairs,  rent, storage costs and expenses of sales, legal expenses,  reasonable
attorney's  fees and other fees or expenses  for which  Debtor is  obligated  to
reimburse Bank in accordance with the terms of the Loan  Documents.  Whether the
Collateral is or is not in Bank's  possession,  and without any obligation to do
so and without  waiving  Debtor's  default for failure to make any such payment,
Bank at its option may pay any such costs and expenses,  discharge  encumbrances
on the Collateral,  and pay for insurance of the  Collateral,  and such payments
shall be a part of the  Obligation  and bear interest at the rate set out in the
Obligation. Debtor agrees to reimburse Bank on demand for any costs so incurred.

     E.  Information and Inspection.  Debtor shall (i) promptly furnish Bank any
information with respect to the Collateral requested by Bank; (ii) allow Bank or
its representatives to inspect the Collateral, at any time and wherever located,
and to inspect and copy, or furnish Bank or its representatives  with copies of,
all records  relating  to the  Collateral  and the  Obligation;  (iii)  promptly
furnish  Bank or its  representatives  such  information  as Bank may request to
identify the Collateral, at the time and in the form requested by Bank; and (iv)
deliver upon request to Bank shipping and delivery receipts

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
evidencing the shipment of goods and invoices evidencing the receipt of, and the
payment for, the Collateral.

     F.  Additional  Documents.  Debtor shall sign and deliver any papers deemed
necessary or desirable in the judgment of Bank to obtain,  maintain, and perfect
the security interest hereunder and to enable Bank to comply with any federal or
state law in order to obtain or perfect Bank's  interest in the Collateral or to
obtain proceeds of the Collateral.

     G. Parties Liable on the Collateral. Debtor shall preserve the liability of
all  obligors on any  Collateral,  shall  preserve  the priority of all security
therefor,  and shall deliver to Bank the original  certificates  of title on all
motor vehicles or other titled vehicles constituting the Collateral.  Bank shall
have  no duty to  preserve  such  liability  or  security,  but may do so at the
expense of Debtor, without waiving Debtor's default.

     H. Records of the Collateral.  Debtor at all times shall maintain  accurate
books and records  covering the  Collateral.  Debtor  immediately  will mark all
books  and  records  with  an  entry  showing  the  absolute  assignment  of all
Collateral  to Bank,  and Bank is hereby  given the right to audit the books and
records of Debtor relating to the Collateral at any time and, from time to time.
The  amounts  shown as owed to Debtor on  Debtor's  books and on any  assignment
schedule will be the undisputed amounts owing and unpaid.

     I.  Disposition of the Collateral.  If disposition of any Collateral  gives
rise to an account, chattel paper or instrument, Debtor immediately shall notify
Bank,  and upon  request of Bank shall  assign or indorse  the same to Bank.  No
Collateral may be sold, leased, manufactured, processed or otherwise disposed of
by Debtor in any manner  without the prior written  consent of Bank,  except the
Collateral  sold,  leased,  manufactured,  processed or consumed in the ordinary
course of business.

     J. Accounts.  Each account held as Collateral  will represent the valid and
legally  enforceable  obligation  of third parties and shall not be evidenced by
any instrument or chattel paper.

     K. Notice/Location of the Collateral. Debtor shall give Bank written notice
of each office of Debtor in which records of Debtor  pertaining to accounts held

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
as Collateral  are kept, and each location at which the Collateral is or will be
kept,  and of any change of any such location.  If no such notice is given,  all
records of Debtor  pertaining to the Collateral and all Collateral of Debtor are
and shall be kept at the address marked by Debtor above.

     L. Change of Name/Status and Notice of Changes. Without the written consent
of Bank, Debtor shall not change its name, change its corporate status,  use any
trade name or engage in any business not  reasonably  related to its business as
presently  conducted.  Debtor shall notify Bank  immediately of (i) any material
change in the Collateral, (ii) a change in Debtor's residence or location, (iii)
a change in any matter warranted or represented by Debtor in this Agreement,  or
in any of the Loan  Documents or furnished to Bank  pursuant to this  Agreement,
and (iv) the occurrence of an Event of Default (hereinafter defined).

     M. Use and Removal of the  Collateral.  Debtor shall not use the Collateral
illegally.  Debtor shall not, unless previously  indicated as a fixture,  permit
the  Collateral  to be affixed to real or  personal  property  without the prior
written  consent of Bank.  Debtor shall not permit any of the  Collateral  to be
removed from the locations specified herein without the prior written consent of
Bank, except for the sale of inventory in the ordinary course of business.

     N.  Possession  of the  Collateral.  Debtor  shall  deliver all  investment
securities and other instruments,  documents and chattel paper which are part of
the Collateral and in Debtor's  possession to Bank immediately,  or if hereafter
acquired,  immediately following  acquisition,  appropriately indorsed to Bank's
order, or with  appropriate,  duly executed powers.  Debtor waives  presentment,
notice of  acceleration,  demand,  notice of  dishonor,  protest,  and all other
notices with respect thereto.

     0. Consumer Credit. If any Collateral or proceeds  includes  obligations of
third parties to Debtor,  the  transactions  giving rise to the Collateral shall
conform in all respects to the applicable state or federal law including but not
limited to consumer  credit law.  Debtor shall hold harmless and indemnify  Bank
against any cost, loss or expense arising from Debtor's breach of this covenant.

     P. Power of  Attorney.  Debtor  appoints  Bank and any  officer  thereof as
Debtor's  attorney-in-fact  with full  power in  Debtor's  name and behalf to do

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
every act which Debtor is  obligated  to do or may be required to do  hereunder;
however,  nothing in this paragraph  shall be construed to obligate Bank to take
any action  hereunder nor shall Bank be liable to Debtor for failure to take any
action  hereunder.  This  appointment  shall be deemed a power  coupled  with an
interest and shall not be  terminable as long as the  Obligation is  outstanding
and shall not terminate on the disability or incompetence of Debtor.

     Q.  Waivers by  Debtor.  Debtor  waives  notice of the  creation,  advance,
increase, existence, extension or renewal of, and of any indulgence with respect
to, the Obligation; waives presentment, demand, notice of dishonor, and protest;
waives notice of the amount of the Obligation outstanding at any time, notice of
any change in financial condition of any person liable for the Obligation or any
part thereof,  notice of any Event of Default,  and all other notices respecting
the Obligation;  and agrees that maturity of the Obligation and any part thereof
may be  accelerated,  extended  or  renewed  one or  more  times  by Bank in its
discretion,  without  notice to Debtor.  Debtor waives any right to require that
any action be brought  against any other person or to require that resort be had
to any other security or to any balance of any deposit  account.  Debtor further
waives any right of  subrogation  or to enforce any right of action  against any
other Debtor until the Obligation is paid in full.

     R. Other  Parties and Other  Collateral.  No renewal or extension of or any
other indulgence with respect to the Obligation or any part thereof,  no release
of any  security,  no  release  of any person  (including  any maker,  indorser,
guarantor  or  surety)  liable on the  Obligation,  no delay in  enforcement  of
payment, and no delay or omission or lack of diligence or care in exercising any
right or power with  respect  to the  Obligation  or any  security  therefor  or
guaranty  thereof or under this  Agreement  shall in any manner impair or affect
the  rights of Bank  under  the law,  hereunder,  or under  any other  agreement
pertaining  to the  Collateral.  Bank  need not file  suit or assert a claim for
personal  judgment  against any person for any part of the Obligation or seek to
realize  upon any other  security  for the  Obligation,  before  foreclosing  or
otherwise realizing upon the Collateral.  Debtor waives any right to the benefit
of or to  require or  control  application  of any other  security  or  proceeds
thereof,  and agrees  that Bank shall  have no duty or  obligation  to Debtor to
apply to the Obligation any such other security or proceeds thereof.

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
     S. Collection and Segregation of Accounts and Right to Notify.  Bank hereby
authorizes  Debtor to  collect  the  Collateral,  subject to the  direction  and
control of Bank,  but Bank may,  without  cause or notice,  curtail or terminate
said authority at any time. Upon notice by Bank, whether oral or in writing,  to
Debtor,  Debtor shall  forthwith upon receipt of all checks,  drafts,  cash, and
other  remittances  in payment of or on account of the  Collateral,  deposit the
same in one or more special accounts  maintained with Bank over which Bank alone
shall have the power of  withdrawal.  The  remittance  of the  proceeds  of such
Collateral  shall  not,  however,  constitute  payment  or  liquidation  of such
Collateral  until Bank shall receive good funds for such proceeds.  Funds placed
in such special  accounts shall be held by Bank as security for all  Obligations
secured  hereunder.  These  proceeds  shall be deposited  in precisely  the form
received,  except  for the  indorsement  of  Debtor  where  necessary  to permit
collection  of  items,  which  indorsement  Debtor  agrees  to make,  and  which
indorsement  Bank is also hereby  authorized,  as attorney-in-  fact, to make on
behalf of Debtor.  In the event Bank has notified  Debtor to make  deposits to a
special account,  pending such deposit, Debtor agrees that it will not commingle
any such  checks,  drafts,  cash or other  remittances  with any  funds or other
property of Debtor, but will hold them separate and apart therefrom, and upon an
express  trust for Bank until  deposit  thereof is made in the special  account.
Bank  will,  from time to time,  apply  the whole or any part of the  Collateral
funds on deposit in this special account against such Obligations as are secured
hereby as Bank may in its sole  discretion  elect. At the sole election of Bank,
any  portion of said funds on deposit in the  special  account  which Bank shall
elect not to apply to the  Obligations,  may be paid over by Bank to Debtor.  At
any time,  whether  Debtor is or is not in  default  hereunder,  Bank may notify
persons  obligated on any Collateral to make payments  directly to Bank and Bank
may take  control  of all  proceeds  of any  Collateral.  Until  Bank  elects to
exercise such rights,  Debtor,  as agent of Bank,  shall collect and enforce all
payments owed on the Collateral.

     T.  Compliance  with State and  Federal  Laws.  Debtor  will  maintain  its
existence,  good standing and qualification to do business,  where required, and
comply  with all laws,  regulations  and  governmental  requirements,  including
without limitation,  environmental laws applicable to it or any of its property,
business operations and transactions.

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
     U. Environmental Covenants. Debtor shall immediately advise Bank in writing
of  (i)  any-and  all  enforcement,   cleanup,   remedial,   removal,  or  other
governmental or regulatory actions instituted,  completed or threatened pursuant
to any  applicable  federal,  state,  or local laws,  ordinances or  regulations
relating to any Hazardous Materials affecting Debtor's business operations;  and
(ii) all claims made or threatened by any third party against Debtor relating to
damages,  contribution,  cost recovery,  compensation,  loss or injury resulting
from any  Hazardous  Materials.  Debtor  shall  immediately  notify  Bank of any
remedial  action taken by Debtor with respect to Debtor's  business  operations.
Debtor will not use or permit any other party to use any Hazardous  Materials at
any of  Debtor's  places of business  or at any other  property  owned by Debtor
except such materials as are  incidental to Debtor's  normal course of business,
maintenance  and repairs and which are handled in compliance with all applicable
environmental  laws.  Debtor agrees to permit Bank, its agents,  contractors and
employees  to enter and inspect any of Debtor's  places of business or any other
property of Debtor at any reasonable  times upon three (3) days prior notice for
the purposes of conducting an environmental  investigation  and audit (including
taking  physical  samples) to insure that Debtor is complying with this covenant
and  Debtor  shall   reimburse  Bank  on  demand  for  the  costs  of  any  such
environmental  investigation  and audit.  Debtor shall provide Bank, its agents,
contractors,  employees and representatives with access to and copies of any and
all data and documents relating to or dealing with any Hazardous Materials used,
generated,  manufactured,  stored or disposed of by Debtor's business operations
within five (5) days of the request therefor.

6. Rights and Powers of Bank.

     A. General. Bank, before or after default, without liability to Debtor may:
obtain from any person information regarding Debtor or Debtor's business,  which
information  any such  person  also may  furnish  without  liability  to Debtor;
require Debtor to give possession or control of any Collateral to Bank;  indorse
as Debtor's agent any instruments,  documents or chattel paper in the Collateral
or representing proceeds of the Collateral;  contact account debtors directly to
verify  information  furnished by Debtor;  take  control of proceeds,  including
stock received as dividends or by reason of stock splits; release the Collateral
in its possession to any Debtor,  temporarily or otherwise;  require  additional
Collateral; reject as unsatisfactory any property hereafter offered by Debtor as

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
Collateral;  set standards from time to time to govern what may be used as after
acquired  Collateral;  designate,  from time to time,  a certain  percent of the
Collateral as the loan value and require Debtor to maintain the Obligation at or
below such figure;  take control of funds generated by the  Collateral,  such as
cash dividends, interest and proceeds or refunds from insurance, and use same to
reduce any part of the  Obligation  and exercise all other rights which an owner
of such  Collateral  may  exercise,  except  the right to vote or dispose of the
Collateral  before  an  Event  of  Default;  at  any  time  transfer  any of the
Collateral  or evidence  thereof into its own name or that of its  nominee;  and
demand, collect, convert, redeem, receipt for, settle,  compromise,  adjust, sue
for, foreclose or realize upon the Collateral, in its own name or in the name of
Debtor,  as Bank may determine.  Bank shall not be liable for failure to collect
any account or instruments,  or for any act or omission on the part of Bank, its
officers, agents or employees, except for its or their own willful misconduct or
gross  negligence.  The foregoing  rights and powers of Bank will be in addition
to,  and not a  limitation  upon,  any  rights  and powers of Bank given by law,
elsewhere  in this  Agreement,  or  otherwise.  If Debtor  fails to maintain any
required  insurance,  to the extent permitted by applicable law Bank may (but is
not obligated to) purchase single interest insurance coverage for the Collateral
which  insurance  may at Bank's option (i) protect only Bank and not provide any
remuneration  or protection for Debtor  directly and (ii) provide  coverage only
after the Obligation has been declared due as herein provided.  The premiums for
any such insurance purchased by Bank shall be a part of the Obligation and shall
bear interest as provided in 3(d) hereof.

     B. Convertible  Collateral.  Bank may present for conversion any Collateral
which is  convertible  into any other  instrument  or  investment  security or a
combination  thereof with cash,  but Bank shall not have any duty to present for
conversion  any  Collateral  unless it shall have received from Debtor  detailed
written  instructions  to that effect at a time reasonably far in advance of the
final conversion date to make such conversion possible.

7. Default.

     A. Event of Default.  An event of default  ("Event of Default") shall occur
if: (i) there is a loss, theft, damage or destruction of any material portion of
the  Collateral  for which there is no insurance  coverage or for which,  in the
opinion of Bank,  there is  insufficient insurance coverage;  (ii) Debtor or any

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
other obligor on all or part of the Obligation shall fail to timely and properly
pay or observe,  keep or perform any term,  covenant,  agreement or condition in
this Agreement or in any other agreement between Debtor and Bank or between Bank
and any other  obligor on the  Obligation,  including,  but not  limited to, any
other note or instrument,  loan agreement,  security  agreement,  deed of trust,
mortgage,  promissory  note,  guaranty,  certificate,   assignment,  instrument,
document  or  other   agreement   concerning   or  related  to  the   Obligation
(collectively,  the "Loan Documents");  (iii) Debtor or such other obligor shall
fail to timely and properly pay or observe,  keep or perform any term, covenant,
agreement or condition in any agreement  between such party and any affiliate or
subsidiary  of Bank of America  Corporation;  (iv) Debtor or such other  obligor
shall fail to timely and  properly  pay or  observe,  keep or perform  any term,
covenant,  agreement or condition in any lease agreement  between such party and
any lessor  pertaining to premises at which any Collateral is located or stored;
or (v) Debtor or such other  obligor  abandons any leased  premises at which any
Collateral  is located or stored and the  Collateral is either moved without the
prior  written  consent  of  Bank or the  Collateral  remains  at the  abandoned
premises.

     B. Rights and Remedies. If any. Event of Default shall occur, then, in each
and every such case, Bank may, without presentment,  demand, or protest;  notice
of default,  dishonor,  demand,  non-payment,  or  protest;  notice of intent to
accelerate all or any part of the  Obligation;  notice of acceleration of all or
any part of the  Obligation;  or notice of any other kind,  all of which  Debtor
hereby expressly  waives,  (except for any notice required under this Agreement,
any other Loan Document or  applicable  law);  at any time  thereafter  exercise
and/or enforce any of the following rights and remedies at Bank's option:

          i.  Acceleration.  The  Obligation  shall,  at Bank's  option,  become
immediately  due and  payable,  and the  obligation,  if any,  of Bank to permit
further borrowings under the Obligation shall at Bank's option immediately cease
and terminate.

          ii.  Possession and Collection of the Collateral.  At its option:  (a)
take possession or control of, store, lease, operate,  manage, sell, or instruct
any Agent or  Broker to sell or  otherwise  dispose  of,  all or any part of the
Collateral;  (b) notify all parties under any account or contract  right forming
all or any part of the  Collateral to make any payments  otherwise due to Debtor
directly  to Bank;  (c) in Bank's own name,  or in the name of  Debtor,  demand,

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
collect,  receive,  sue for, and give  receipts  and  releases  for, any and all
amounts due under such accounts and contract rights; (d) indorse as the agent of
Debtor any check, note, chattel paper,  documents, or instruments forming all or
any part of the Collateral; (a) make formal application for transfer to Bank (or
to any assignee of Bank or to any purchaser of any of the  Collateral) of all of
Debtor's permits, licenses, approvals,  agreements, and the like relating to the
Collateral or to Debtor's  business;  (f) take any other action which Bank deems
necessary or desirable to protect and realize upon its security  interest in the
Collateral;  and (g) in  addition  to the  foregoing,  and  not in  substitution
therefor,  exercise  any one or more of the rights and remedies  exercisable  by
Bank under any other  provision of this  Agreement,  under any of the other Loan
Documents, or as provided by applicable law (including,  without limitation, the
Uniform Commercial Code as in effect in Maryland (hereinafter referred to as the
"UCC")). In taking possession of the Collateral Bank may enter Debtor's premises
and otherwise proceed without legal process,  if this can be done without breach
of the peace.

Debtor shall, upon Bank's demand, promptly make the Collateral or other security
available to Bank at a place designated by Bank, which place shall be reasonably
convenient to both parties.

Bank shall not be liable for, nor be prejudiced  by, any loss,  depreciation  or
other damages to the  Collateral,  unless caused by Bank's willful and malicious
act.  Bank  shall  have no duty to take any action to  preserve  or collect  the
Collateral.

          iii. Receiver.  Obtain the appointment of a receiver for all or any of
the Collateral,  Debtor hereby  consenting to the appointment of such a receiver
and agreeing not to oppose any such appointment.

          iv. Right of Set Off. Without notice or demand to Debtor,  set off and
apply  against any and all of the  Obligation  any and all deposits  (general or
special,  time or demand,  provisional or final) and any other indebtedness,  at
any time held or owing by Bank or any of Bank's  agents or  affiliates to or for
the credit of the  account of Debtor or any  guarantor  or  indorser of Debtor's
Obligation.

Bank  shall be  entitled  to  immediate  possession  of all  books  and  records
evidencing  any  Collateral  or  pertaining  to  chattel  paper  covered by this
Agreement and it or its  representatives  shall have the authority to enter upon

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
any premises upon which any of the same, or any Collateral,  may be situated and
remove the same therefrom  without  liability.  Bank may surrender any insurance
policies in the  Collateral  and receive the unearned  premium  thereon.  Debtor
shall be entitled to any surplus and shall be liable to Bank for any deficiency.
The  proceeds  of  any  disposition  after  default  available  to  satisfy  the
Obligation  shall be applied to the  Obligation in such order and in such manner
as Bank in its discretion shall decide.

Debtor specifically  understands and agrees that any sale by Bank of all or part
of the  Collateral  pursuant to the terms of this  Agreement  may be effected by
Bank at times and in manners  which could result in the proceeds of such sale as
being  significantly  and materially  less than might have been received if such
sale had occurred at different times or in different manners,  and Debtor hereby
releases Bank and its officers and representatives  from and against any and all
obligations and liabilities arising out of or related to the timing or manner of
any such sale.

If,  in the  opinion  of Bank,  there  is any  question  that a  public  sale or
distribution of any Collateral will violate any state or federal securities law,
Bank  may  offer  and  sell  such  Collateral  in  a  transaction   exempt  from
registration  under federal securities law, and any such sale made in good faith
by Bank shall be deemed "commercially reasonable".

8. General.

     A. Parties Bound. Bank's rights hereunder shall inure to the benefit of its
successors  and assigns.  In the event of any  assignment or transfer by Bank of
any  of the  Obligation  or the  Collateral,  Bank  thereafter  shall  be  fully
discharged from any responsibility with respect to the Collateral so assigned or
transferred,  but Bank shall  retain all  rights  and powers  hereby  given with
respect  to  any  of  the  Obligation  or the  Collateral  not  so  assigned  or
transferred.  All  representations,  warranties and agreements of Debtor if more
than one are  joint  and  several  and all shall be  binding  upon the  personal
representatives, heirs, successors and assigns of Debtor.

     B. Waiver.  No delay of Bank in exercising any power or right shall operate
as a waiver  thereof;  nor shall any single or partial  exercise of any power or
right  preclude other or further  exercise  thereof or the exercise of any other

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
power or right.  No waiver by Bank of any right  hereunder  or of any default by
Debtor shall be binding  upon Bank unless in writing,  and no failure by Bank to
exercise  any power or right  hereunder or waiver of any default by Debtor shall
operate as a waiver of any other or further  exercise  of such right or power or
of any further  default.  Each right,  power and remedy of Bank as provided  for
herein or in any of the Loan Documents, or which shall now or hereafter exist at
law or in equity or by-statute or otherwise,  shall be cumulative and concurrent
and shall be in  addition  to every  other  such  right,  power or  remedy.  The
exercise or beginning of the exercise by Bank of any one or more of such rights,
powers or remedies shall not preclude the simultaneous or later exercise by Bank
of any or all other such rights, powers or remedies.

     C.  Agreement  Continuing.  This  Agreement  shall  constitute a continuing
agreement,  applying to all future as well as existing transactions,  whether or
not of the  character  contemplated  at the date of this  Agreement,  and if all
transactions  between  Bank and  Debtor  shall be closed  at any time,  shall be
equally  applicable  to any  new  transactions  thereafter.  Provisions  of this
Agreement,  unless  by their  terms  exclusive,  shall be in  addition  to other
agreements between the parties. Time is of the essence of this Agreement.

     D. Definitions. Unless the context indicates otherwise,  definitions in the
UCC apply to words and phrases in this Agreement;  if UCC definitions  conflict,
Article 9 definitions apply.

     E. Notices.  Notice shall be deemed reasonable if mailed postage prepaid at
least five (5) days before the related action (or if the UCC elsewhere specifies
a longer period, such longer period) to the address of Debtor given above, or to
such other  address as any party may  designate  by written  notice to the other
party. Each notice, request and demand shall be deemed given or made, if sent by
mail,  upon the earlier of the date of receipt or five (5) days after deposit in
the U.S. Mail, first class postage prepaid,  or if sent by any other means, upon
delivery.

     F.  Modifications.  No provision hereof shall be modified or limited except
by a written  agreement  expressly  referring  hereto and to the  provisions  so
modified  or  limited  and  signed by Debtor  and Bank.  The  provisions  of the
Agreement  shall not be  modified  or  limited  by course of conduct or usage of
trade.

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
     G. Applicable Law and Partial Invalidity. This Agreement has been delivered
in the State of Maryland and shall be construed in  accordance  with the laws of
that  State.  Wherever  possible  each  provision  of this  Agreement  shall  be
interpreted  in such manner as to be effective and valid under  applicable  law,
but if any provision of this  Agreement  shall be prohibited by or invalid under
applicable  law,  such  provision  shall be  ineffective  to the  extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or  the   remaining   provisions   of  this   Agreement.   The   invalidity   or
unenforceability  of any  provision  of any  Loan  Document  to  any  person  or
circumstance  shall not affect the  enforceability or validity of such provision
as it may apply to other persons or circumstances.

     H.  Financing  Statement.  To the extent  permitted  by  applicable  law, a
carbon,  photographic  or other  reproduction of this Agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.

     I.  WAIVER OF JURY  TRIAL.  DEBTOR  WAIVES  TRIAL BY JURY IN ANY  ACTION OR
PROCEEDING  TO  WHICH  DEBTOR  AND  BANK MAY BE  PARTIES,  ARISING  OUT OF OR IN
CONNECTION  WITH  OR IN ANY  WAY  PERTAINING  TO  THIS  AGREEMENT,  OR THE  LOAN
DOCUMENTS.  IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS  AGAINST ALL PARTIES TO SUCH ACTION OR  PROCEEDINGS,
INCLUDING  CLAIMS AGAINST  PARTIES WHO ARE NOT PARTIES TO THIS  AGREEMENT.  THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY DEBTOR.

     J.  Controlling  Document.  To the  extent  that  this  Security  Agreement
conflicts  with or is in any way  incompatible  with  any  other  Loan  Document
concerning  the  Obligation,  any  promissory  note shall control over any other
document,  and if such note does not address an issue,  then each other document
shall control to the extent that it deals most specifically with an issue.

     K.  Execution  Under Seal.  This  Agreement is being executed under seal by
Debtor(s).

     L. Additional  Provisions.  See Schedule  attached hereto and  incorporated
hereunder for all purposes.

     M. NOTICE OF FINAL AGREEMENT. THIS WRITTEN SECURITY AGREEMENT AND THE OTHER
LOAN DOCUMENTS  REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
IN WITNESS  WHEREOF AND INTENDING TO CREATE AN INSTRUMENT  EXECUTED  UNDER SEAL,
the parties hereto have caused this Security Agreement to be duly executed under
seal by  their  duly  authorized  representatives  as of the  date  first  above
written.

Bank/Secured Party:

Bank of America, N.A.

By: /s/ Patrick Moore
    ------------------------------------
Name: Patrick Moore

Title: Vice President

Corporate or Partnership Debtor/Pledgor:

Rent-A-Wreck of America, Inc.

By: /s/ Kenneth Blum, Jr.(Seal)
    ------------------------------------
Name: Kenneth Blum, Jr.

Title: President
----------------------------------------
Attest (If Applicable)

[Corporate Seal]

MDO 71                                                        Approved: 07/01/95
jt                                                             Revised: 08/30/99Bank of America                                     Application and Agreement
                                                    For Standby Letter of Credit

Letter of Credit Department
Please  issue an  Irrevocable  Letter  of  Credit  in  Favor of the  Beneficiary
substantially as shown below and deliver the Credit by overnight delivery

[ ] Regular Mail [ ] Courier [ ] Teletransmission

Letter of Credit Number
(For Banc of America use only)

Date 3/30/00

Applicant (full name and mailing address)

         Consolidated American Rental Insurance
         Company, Ltd.
         10324 South Dolfield Road
         Owings Mills, Maryland 21117

For Account of (if different from Applicant)

Beneficiary (full name and mailing address; if courier delivery is requested
         full street address must be provided)

         National Union Fire Insurance Company
         of Pittsburg, PA.
         70 Pine Street 4th floor
         New York, New York 10270
         Attn: Arthur Stillwell

Advising Bank (if left blank, Banc of America will choose as
         appropriate)

Amount (in figures and words)

         ONE MILLION DOLLARS                      $1,000,000.00
         Currency                                 (If left blank, U.S. dollars
                                                  will apply)

Expiry  Date  (draft  must be  presented  to  drawee  or for  negotiation  [when
negotiable] on or before):

         3/31/01
<PAGE>
Available by draft(s) at Sight drawn,  at Banc of America's  option,  on Banc of
America or Banc of America's  correspondent  when  accompanied  by the following
document(s):  (Please  check  the  documents  and  fill in the  blanks  below as
applicable)

[ ] A written  statement  purportedly  signed by (if left blank the Beneficiary)
with the following wording:

Quote
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[ ] Other:

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[X] Issue  Credit as per  attached  exhibit  marked  exhibit  A  (exhibit  is an
integral part of the Agreement).
<PAGE>
Note: if the Credit provides for automatic renewal without amendment,  Applicant
agrees  that it will  notify Banc of America in writing at least sixty (60) days
prior to the last day specified in the Credit by which Banc of America must give
notice of  nonrenewal  as to whether or not it wishes the Credit to be  renewed.
Any decision to renew or not renew the Credit shall be in Banc of America's sole
discretion.  Applicant  hereby  acknowledges  that in the event  Banc of America
notifies  the  Beneficiary  of the Credit  that it has  elected not to renew the
Credit,  the Credit may be drawn on if  permitted by the terms of the Credit and
further  acknowledges  and agrees that Applicant shall have no claim or cause of
action  against Banc of America or defense  against  payment under the Agreement
for Banc of America's  renewal or  non-renewal  of the Credit in the exercise of
Banc of America's discretion as set forth above.

Multiple Drawings   [ ] Prohibited (permitted if left blank)

--------------------------------------------------------------------------------

Special  Instructions  to Banc of America  Not to be  included in the Credit (if
any):

--------------------------------------------------------------------------------

The terms and  conditions  set out above and below,  and any attached  exhibits,
supplements or schedules referred to in this Application,  have been reviewed by
Applicant,  and by  Applicant's  signature  below  and  for  good  and  valuable
consideration, Applicant agrees to the same and to be obligated and liable under
the Agreement. In the event this Application requests an Account Party different
<PAGE>
from Applicant, then such party may sign below as Co-Applicant,  but the failure
of such Account Party to become a Co-Applicant  shall not affect the obligations
of Applicant under the Agreement.  Completion and submittal of this  Application
by Applicant  does not obligate  Banc of America to enter into the  Agreement or
issue the requested Credit.

NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN  THE  PARTIES  AND  MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

Consolidated American Rental Insurance Company, Inc.
Name of Company, or signature if Applicant is an individual

By /s/
   -------------------------------------------
   Authorized Signature/Title

10324 South Dolfield Road
Address
Owings Mills, MD 21117

(410)581-5755     (410)581-1566
telephone         fax

03/24/00          98-0181386
Date              Federal Tax ID Number

Name of Company, or signature if Co-Applicant is an individual

By
   ------------------------------------
        Authorized Signature/Title

---------------------------------------
Address

---------------------------------------

-------------------  ------------------
telephone            fax

-----------  --------------------------
Date         Federal Tax ID Number
<PAGE>
Bank Use Only

Approving Bank Officer - Signature

/s/ Patrick M. Moore
---------------------------------------
Approving Bank Officer - Printed
Patrick M. Moore

Officer Number
PMM99

Officer - Title

---------------------------------------
                              President

Officer - Interoffice Address
MD4-302-16-02

Cost Center Number
5012613

Officer Phone Number (area code and number)
410-605-5351

Purpose Code
842

Officer Fax Number (area code and number)
410-837-4335
<PAGE>
1. Definitions.

In the Agreement:

(1) "Agreement"  means the  Application,  the terms and conditions set out above
and below, and the Credit,  together with any and all modifications,  amendments
and extensions of any thereof.

(2) "Applicable  Interest Rate" means,  unless otherwise defined in and governed
by a separate agreement between Banc of America and Applicant, the lesser of the
maximum lawful rate permitted by applicable law or a per annum rate  (calculated
on the basis of a 360 day year)  equal to the sum of the prime rate of  interest
established by Banc of America from time to time (which is not  necessarily  the
lowest  or best  rate of  interest  charged  by  Banc of  America  to any of its
customers) plus three percent.

(3)  "Applicant"  means,  singularly  or  collectively,  and,  if more than one,
jointly and severally, each person or entity who has executed the Application as
Applicant or Co-Applicant.

(4) "Application"  means the foregoing  application of Applicant relating to the
Credit as such  application  may be  amended  or  modified  from time to time in
accordance herewith.

(5) "Credit" or "Letter of Credit" means the letter of credit issued pursuant to
the Application as it may be amended or modified from time to time in accordance
herewith.

(6) "instrument" means the Credit or any draft,  receipt,  acceptance or written
demand (to include teletransmissions) for payment under the Credit.

(7)  "Banc  of  America"  means  the  banking  subsidiary  of  Banc  of  America
Corporation that issues the Credit in the sole discretion of Banc of America.

(8)  "property"  means  goods  and  any  and  all  documents   related  thereto,
securities,  funds,  choses in action,  and any and all other forms of property,
whether real, personal or mixed and any right or interest therein.

2. Promise to Pay.

(a) As to  instruments  drawn under or  purporting to be drawn under the Credit,
which are  payable  in United  States  currency:  (i) in the case of each  sight
instrument,  Applicant will reimburse Banc of America,  at the address specified
by Banc of America to  Applicant,  on demand,  in United  States  currency,  the
amount paid thereon, or, if so demanded by Banc of America,  will pay to Banc of
America in advance the amount  required to pay the same; and (ii) in the case of
each time  instrument,  Applicant  will pay to Banc of  America,  at the address
<PAGE>
specified by Banc of America to Applicant, in United States currency, the amount
thereof,  on demand  but in any event not later than one  business  day prior to
maturity  of such  time  instrument  at th place  specified  by the  Credit  for
payment.

(b) As to  instruments  drawn under or  purporting to be drawn under the Credit,
which are payable in currency other than United States currency: (i) in the case
of each sight  instrument,  Applicant  will  reimburse  Banc of America,  at the
address  specified by Banc of America to Applicant,  on demand, in United States
currency,  the equivalent of the amount paid under the instrument (together with
all taxes, levies,  imposts,  duties,  charges and fees of any nature imposed by
any  government or other taxing  authority  including  interest and penalties in
connection  therewith  (collectively  "F/X Taxes") at Banc of America's  selling
rate  of  exchange   at  the  time  of  payment   under  the   instrument,   for
teletransmission  to  the  place  of  payment  in the  currency  in  which  such
instrument is payable,  or, if so demanded by Banc of America,  will pay to Banc
of America, in advance, in Untied States currency,  the equivalent of the amount
required to pay the same; and (ii)in the case of each time instrument, Applicant
will pay to Banc of  America,  at the  address  specified  by Banc of America to
Applicant,  on demand,  but in any event  sufficiently in advance of maturity of
such time instrument to enable Banc of America to arrange for cover to reach the
place of payment  not later  than three  business  days prior to  maturity,  the
equivalent of the time  instrument  together with all F/X taxes in United States
currency at Banc of America's selling rate of exchange, at the time of provision
of cover, for  teletransmission to the place of payment in the currency in which
such instrument is payable. If for any cause whatsoever there exists at the time
in question no rate of exchange  generally  current for  effecting  transfers as
above  described,  or such  currency is not  available  for  purchase by Banc of
America, Applicant agrees to pay Banc of America on demand, at Bank of America's
election,  (i) an amount in United States currency equivalent to the actual cost
to Banc of America of settlement  of Banc of America's  obligation to the holder
of the  instrument  or other  person,  together  with all F/X taxes  however and
whenever such settlement shall be made by Banc of America,  or (ii) an amount in
United States currency  equivalent to the estimated cost to Banc of America,  as
projected  by Banc of America,  of the future  settlement  of Banc of  America's
obligation to the holder of the  instrument  or other person,  together with all
F/X  taxes  provided  that  upon  the  actual  settlement  of Banc of  America's
obligation,  however and whenever  occurring,  Banc of America  shall  reimburse
Applicant  of  Applicant  shall pay to Banc of  America,  as the case may be, an
amount in United States  currency  equal to the  difference  between the initial
estimated  payment by  Applicant  to Banc of America  and the actual  settlement
amount paid by Banc of America.
<PAGE>
(c) Banc of America may accept or pay any instrument presented to it, regardless
of when  drawn and  whether or not  negotiated,  if such  instrument,  the other
required  documents  and any  transmittal  advice  are  dated on or  before  the
expiration date of the Credit,  and Banc of America may honor, as complying with
the terms of the Credit and of the Agreement, any instruments or other documents
otherwise  in order  signed or issued by any  person who is, or is in good faith
believed  by Banc of  America  to be, an  administrator,  executor,  trustee  in
bankruptcy,  debtor in  possession,  conservator,  assignee  for the  benefit of
creditors,  liquidator,  receiver or other legal  representative or successor by
operation of law of the party  authorized under the Credit to draw or issue such
instruments or other documents.

3. Promise to Pay Interest and Fees.

(a)  Applicant  will pay  Banc of  America,  on  demand:  (i) Banc of  America's
commission at the rate set forth in a separate written agreement between Banc of
America and Applicant or, in the absence of a separate  agreement,  at such rate
as Banc of America may  determine  to be proper,  (ii) unless  actually  paid or
reimbursed to Banc of America by Beneficiary  or another  person or entity,  all
charges and expenses paid or incurred by Banc of America in connection  with the
Credit,  including,  without  limitation,  reasonable  attorneys'  fees  for the
enforcement of any rights  hereunder and any charges of other banks not paid for
by the  Beneficiary or another  party,  and (iii) interest on any amounts due by
Applicant  to Banc of  America  hereunder  from the date due of  payment  at the
Applicable Interest Rate.

(b) No  provision  of the  Agreement  shall  require  the  payment or permit the
collection  of interest in excess of the maximum rate  permitted  by  applicable
law.

4. Clean Advances.

If the Application  requests  inclusion in the Credit of any provision for clean
advances  to the  Beneficiary,  Banc of America  may place in the Credit  such a
provision in that respect as Banc of America may deem  appropriate,  under which
any bank entitled to negotiate drafts under the Credit, acting in its discretion
in each  instance  and  upon  the  receipt  of a  request  in  writing  from the
Beneficiary,  may make one or more clean advances at any time on or prior to the
date by which drafts are to be  negotiated  under the Credit.  The  aggregate of
such  advances  shall in no  event be more  than  the  amount  specified  in the
Application for clean advances, and whether or not specified therein in no event
shall any such advance exceed the amount remaining available under the Credit at
the time of the  advance.  While it is  expected  by  Applicant  that  each such
advance will be repaid by the Beneficiary to the bank that made the advance from
the proceeds of any drafts  drawn under the Credit,  should any such advance not
<PAGE>
be thus repaid,  Applicant will on demand pay Banc of America the amount thereof
as if such  advance  was  evidenced  by drafts  drawn  under the  Credit.  It is
understood  that  neither  Banc of  America  nor any bank  which  may make  such
advances  shall be obligated to inquire into the use that may be made thereof by
the  Beneficiary  and that Banc of  America  and each such bank shall be without
liability for any wrongful use that may be made by the  Beneficiary of any funds
so advanced.

5. Uniform Customs and practice.

The Uniform Customs and Practice for Documentary Credits, as published as of the
date of issue of the  Credit  by the  International  Chamber  of  Commerce  (the
"UCP"),  shall  in  all  respects  be  deemed  a  part  hereof  as  fully  as if
incorporated  herein and shall apply to the Credit.  Unless  expressly  provided
otherwise  in the  Credit,  in  the  event  any  provision  of the  UCP is or is
construed to vary from or be in conflict  with the laws of the United  States of
America  or any state [IT LOOKS  LIKE THE TOP OF PG. 5 OF THE FAX IS CUT OFF AND
TEXT IS  MISSING]  any action or fail to take action if such would cause Banc of
America to violate applicable law or regulation.

6. Licenses and Compliance.

Applicant  will  procure  promptly  any  necessary  licenses  for  the  services
performed  or the  import,  export or  shipping  of  property  shipped  under or
pursuant to or in connection  with the Credit,  and will comply with all foreign
and domestic  laws,  rules and  regulations  now or hereafter  applicable to the
transaction  related to the Credit or applicable to the execution,  delivery and
performance by Applicant of the Agreement.  Applicant  further agrees to furnish
to Banc of America such  evidence in respect of the above as Banc of America may
at any time require.

7. Insurance.

Applicant  shall  keep  such  property  as  may  be the  subject  of the  Credit
adequately  covered by insurance in amounts,  against  risks and with  companies
satisfactory to Banc of America.  Applicant hereby  irrevocably grants its power
of  attorney  to Banc of  America  and any of its  officers,  with the  power of
substitution,  to endorse any check in the name of Applicant received in payment
of any loss or adjustment covered by such insurance.

8. Default.

(a) In the event of the  happening  of any one or more of the  following  events
(any such event being hereinafter call an "Event of Default"),  namely:  (i) the
nonpayment  of any  obligations  of  Applicant  to Banc of  America  (under  the
<PAGE>
Agreement  or  otherwise),  or to any other  person or entity,  now or hereafter
existing,  when due, or (ii) the failure of  Applicant to perform or observe any
other term or covenant of the Agreement, or (iii) the dissolution or termination
of existence of Applicant,  or (iv) the  institution by or against  Applicant of
any  proceeding  seeking to  adjudicate  Applicant a bankrupt or  insolvent,  or
seeking  liquidation,  winding  up,  reorganization,   arrangement,  adjustment,
protection,  relief,  or  composition  of  Applicant  or its debts under any law
relating to bankruptcy,  insolvency or reorganization  or relief of debtors,  or
seeking  the entry of an order  for  relief of the  appointment  of a  receiver,
trustee,  custodian,  or  other  similar  official  for  Applicant  or  for  any
substantial part of its property, or (v) any seizure, vesting or intervention by
or under  authority  of a  government  by which the  management  of Applicant is
displaced or its authority in the control of its business is curtailed,  or (vi)
the  attachment  of or restrain as to any  substantial  funds or other  property
which may be in, or come into, the possession or control of Banc of America,  or
of any third  party  acting on Banc of  America's  behalf,  for the  account  or
benefit  of  Applicant,  or the  issuance  of any order of court or other  legal
process  against the same,  or (vii) the  occurrence  of any of the above events
with respect to any person or entity which has  guaranteed,  or signed a comfort
letter,  support  agreement or similar document with respect to, any obligations
of Applicant to Banc of America  (under the Agreement or  otherwise),  or (viii)
any  representation,  warranty,  certification or statement made or submitted by
the Applicant to Banc of America shall be false,  misleading or incorrect in any
material  respect when made or deemed  made;  or (ix) any person or entity which
has  guaranteed,  or signed a  comfort  letter,  support  agreement  or  similar
document with respect to, any obligations of Applicant to Banc of America (under
this  Agreement  or  otherwise)  shall  default  under the terms of, or deny the
validity,  binding effect or enforceability of, such guarantee,  comfort letter,
support agreement or similar document;  then, or at any time after the happening
of such  event,  the  amount  of the  Credit,  as  well  as any  and  all  other
obligations  of  Applicant  under the  Agreement,  shall,  at Banc of  America's
option,  and  whether  or not  otherwise  then due and  payable,  become due and
payable immediately without demand upon or notice to Applicant.

(b) Upon the occurrence and during the continuance of any Event of Default, Banc
of  America  is hereby  authorized  to set off and  apply  any and all  deposits
(general or special, time or demand,  provisional or final) at any time held and
other  indebtedness  at any time owing by Banc of America or any  subsidiary  or
affiliate  of Banc of America to or for the credit or the  account of  Applicant
against  any and all of  Applicant's  obligations  to Banc of America  under the
Agreement,  whether or not Banc of America  shall have made any demand under the
Agreement  and  although  such  deposits,  indebtedness  or  obligations  may be
<PAGE>
unmatured or contingent, Banc of America's rights under this Section 8(b) are in
addition to other  rights and remedies  (including,  without  limitation,  other
rights of set-off) which Banc of America may have.

9. Security.

(a) As  collateral  for the payment of any and all  obligations  of Applicant to
Banc of America under the Agreement,  Applicant hereby grants to Banc of America
a  security  interest  in (i)  any and  all  documents  of  title,  policies  or
certificates  of  insurance  and other  documents  accompanying  or  related  to
instruments drawn under the Credit, and any and all other property shipped under
or in connection  with the Credit or in any way related thereto or to any of the
instruments  drawn  thereunder  (whether or not such  documents  or property are
released to or upon the order of Applicant in trust or  otherwise)  and (ii) any
and all proceeds and  products of the  foregoing.  Also to secure the payment of
any and all obligations of Applicant under the Agreement,  Banc of America shall
be subrogated to the rights of Applicant in respect of any  transaction to which
the  Credit  relates.  Insofar  as any  property  which  may be  held by Banc of
America,  or for Banc of  America's  account,  as  collateral  hereunder  may be
released to or upon the order of Applicant,  Applicant hereby  acknowledges that
such  delivery of  property  is in trust  pending  satisfaction  of  Applicant's
obligations to Banc of America under the agreement, and hereby agrees to execute
and/or  file such  receipts,  agreements,  forms or other  documents  as Banc of
America may request to further  evidence  Banc of  America's  interests  in such
property, it being understood that Banc of America's rights as specified therein
shall be in furtherance of and in addition to (but not in limitation of) Banc of
America's rights hereunder. If at any time and from time to time Banc of America
in good faith deems  itself  insecure  and requires  collateral  (or  additional
collateral), Applicant will, on demand, assign and deliver to Banc of America as
security  for  any  and  all  obligations  of  Applicant  under  the  Agreement,
collateral of a type and value satisfactory to Banc of America or make such cash
payment as Banc of America may require. Banc of America is hereby authorized, at
its option at any time and with or without  notice to Applicant,  to transfer to
or register in its name or the name of any Banc of America's nominees all or any
part of the property subject to any of the security  interests  granted under or
contemplated  by the  Agreement.  Banc of  America  is also  authorized,  at its
option,  to file  financing  statements  without the signature of Applicant with
respect to all or any part of such property.  Applicant will pay the cost of any
such filing and,  upon the  request of Banc of America,  sign such  instruments,
documents or other papers,  and take such other  action,  as Banc of America may
reasonably require to perfect such security interests.
<PAGE>
(b) If any Event of  Default  shall have  occurred  and be  continuing,  Banc of
America may exercise in respect of the  property  subject to any of the security
interests  granted  under or  contemplated  by the  Agreement all the rights and
remedies of a secured party on default under the applicable  Uniform  Commercial
Code or any other  applicable law, and also may, with notice except as specified
below,  sell such  property or any part thereof in one or more parcels at public
or private sale, at any Banc of America office or elsewhere, for cash, on credit
or for future  delivery,  and upon such other  terms as Banc of America may deem
commercially reasonable.  To the extent notice of sale of such property shall be
required by law,  reasonable  notification  shall be satisfied by written notice
mailed or delivered to  Applicant at the address  specified  above at least five
business  days prior to the date of public sale or prior to the date after which
private sale is to be made.  Applicant will pay to Banc of America on demand all
costs and expenses (including,  without limitation,  reasonable  attorney's fees
and legal expenses)  related or incidental to the custody,  preservation or sale
of, or  collection  from,  or other  realization  upon,  any of such property or
related or incidental to the  establishment,  preservation or enforcement of the
rights of Banc of America in respect of any such property.  In the event of sale
of, collection from, or other realization upon all or any part of such property,
Banc of America may, in its discretion,  hold the proceeds thereof as additional
collateral  hereunder  or then or at any  time  thereafter  apply  the  proceeds
thereof to the payment of such of the costs and  expenses  referred to above and
such of the  obligations of Applicant  under the Agreement,  whether or not then
due, as Banc of America may determine in its discretion,  any surplus to be paid
over to  Applicant  or to  whomever  may be lawfully  entitled  to receive  such
surplus.

10. Indemnity.

Applicant  will  indemnify  and hold Banc of America  (such term to include  for
purposes of this paragraph its affiliates and its and its affiliates'  officers,
directors,  employees  and  agents)  harmless  from and  against (i) all loss or
damage  arising out of the  issuance  of, or any other  action taken by any such
indemnified  party in  connection  with,  the  Credit  other than loss or damage
resulting from the gross  negligence or willful  misconduct of the party seeking
indemnification,   and  (ii)  all  costs  and  expenses  (including   reasonable
attorney's fees and legal expenses) of all claims or legal  proceedings  arising
out of Banc of America's issuance of the Credit or incident to the collection of
amounts owed by Applicant  hereunder or the enforcement of the rights of Banc of
America hereunder,  including,  without limitation, legal proceedings related to
any court order,  injunction,  or other process or decree restraining or seeking
to  restrain   Banc  of  America  from  paying  any  amount  under  the  Credit.
Additionally,  Applicant will  indemnify and hold Banc of America  harmless from
<PAGE>
and against all claims, losses, damages, suits, costs or expenses arising out of
Applicant's  failure to timely procure  licenses or comply with applicable laws,
regulations or rules,  or any other conduct or failure of Applicant  relating to
or affecting the Credit.  No delay,  extension of time,  renewal,  compromise or
other  indulgence  which may occur or be granted by Banc of America shall impair
the rights or powers of Banc of America hereunder.  Banc of America shall not be
deemed to have waived any of its rights hereunder, unless Banc of America or its
authorized agent shall have signed such waiver in writing.

12. Agency.

If Applicant is a financial  institution  (the "Financial  Institution")  and is
requesting  the issuance of the Credit for its customer  (the  "Customer"),  the
Financial  Institution hereby irrevocably  appoints Banc of America as its agent
and attorney-  in-fact to issue the Credit in accordance  with,  and subject to,
the Agreement.  The Financial  Institution shall pay Banc of America all amounts
owed by the Customer under the Agreement when due,  whether or not the Financial
Institution  has  received  payment  from the  Customer and shall pay to Banc of
America its fees and expenses according to its fee schedule from time to time in
effect.  The Financial  Institution  hereby grants to Banc of America a security
interest in all of the property in which the Customer has heretofore  granted or
may hereafter grant to the Financial  Institution a security  interest to secure
the obligations of the Customer under the Agreement.

13. Miscellaneous.

(a) Any  notice  from Banc of America to  Applicant  shall be deemed  given when
mailed,  postage  paid,  or when  delivered  to a courier,  fee paid by shipper,
addressed to Applicant at the last  business  address  furnished by Applicant to
Banc of America, or when confirmed by electronic confirmation to Banc of America
as having been  delivered  via facsimile or other  teletransmission.  Any notice
from  Applicant  to Banc of  America  shall  be sent to the  address  of Banc of
America  specified by Banc of America to Applicant  and shall be effective  upon
receipt by Banc of America.

(b) Each provision of the Agreement shall be interpreted in such manner as to be
effective and valid under  applicable  law but if any provision of the Agreement
shall be prohibited by or invalid under  applicable law, such provision shall be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating the remainder of such provision or the remaining  provisions of the
Agreement.

(c) If any law, treaty, regulation or the interpretation thereof by any court or
administrative or governmental authority shall impose, modify or deem applicable
<PAGE>
any capital,  reserve,  insurance premium or similar requirement against letters
of credit issued by Banc of America and the result  thereof shall be to increase
the  cost  to Banc of  America  of  making  any  payment  under  or  issuing  or
maintaining  the Credit or to reduce the yield to Banc of America in  connection
with the Credit or the Agreement then, on demand,  Applicant will pay to Banc of
America,  from time to time, such  additional  amounts as Banc of America may in
good faith  determine  to be necessary  to  compensate  Banc of America for such
increased cost or reduced yield.

(d) Any and all payments  made to Banc of America  hereunder  shall be made free
and clear of and  without  deduction  for any present or future  taxes,  levies,
imposts, deductions,  charges, or withholdings, and all liabilities with respect
thereto,  excluding  taxes  imposed on net  income and all income and  franchise
taxes  of the  United  States  and  any  political  subdivisions  thereof  (such
nonexcluded  taxes being herein called "Taxes").  If Applicant shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder,  (i)
the sum payable  shall be increased as may be necessary so that after making all
required deductions  (including deductions applicable to additional sums payable
under this Section 13(d)),  Banc of America shall receive an amount equal to the
sum Banc of America would have received had no such  deductions  been made, (ii)
Applicant  shall make such  deductions,  and (iii)  Applicant shall pay the full
amount  deducted to the relevant  authority in accordance  with  applicable law.
Applicant  will  indemnify  Banc  of  America  for  the  full  amount  of  Taxes
(including, without limitation, any Taxes imposed by any jurisdiction on amounts
payable  under this  Section  13(d)) paid by Banc of America  and any  liability
(including  penalties,  interest and expenses) arising therefrom or with respect
thereto,  whether or not such Taxes were  correctly  or legally  asserted.  This
indemnification shall be made within 30 days from the date Banc of America makes
written demand therefor.  Within 30 days after the date of any payment of Taxes,
Applicant  will furnish to Banc of America the original or a certified copy of a
receipt evidencing payment thereof.

(e) The Agreement shall be binding upon  Applicant,  its successors and assigns,
and shall inure to the benefit of Banc of America,  its successors,  transferees
and assigns;  provided that any  assignment by Applicant of any of its rights or
obligations  under the Agreement  without the prior  written  consent of Banc of
America shall be void.

(f)  Applicant  hereby  authorizes  Banc  of  America,   in  Banc  of  America's
discretion,  to set  forth the terms of the  Application  in the  Credit in such
language as Banc of America deems  appropriate,  with  variations not materially
inconsistent with the Application.
<PAGE>
(g) Any  action,  inaction,  waiver or  omission  taken or  suffered  by Banc of
America or by any of its  correspondents  under or in connection with the Credit
or any  related  instruments,  services  or  property,  if in good  faith and in
conformity  with foreign or domestic  laws,  regulations  or customs  applicable
thereto,  shall be binding upon Applicant and shall not place Banc of America or
any of its correspondents  under any resulting  liability to Applicant.  Without
limiting the generality of the foregoing, Banc of America and its correspondents
may act in reliance upon any written, oral, telephonic,  telegraphic,  facsimile
or other  request or  notice,  believed  in good faith to have been  authorized,
whether or not given or signed by an authorized person.

(h) In the event of any change or  modification,  with the consent of Applicant,
relative to the Credit or any instrument  called for  thereunder,  including any
waiver  made or in good faith  believed  by Banc of America to have been made by
Applicant of any term hereof or the  noncompliance  of any such instruments with
the terms of the Credit,  the  Agreement  shall be binding upon  Applicant  with
regard to the Credit as so changed or modified,  and to any action taken by Banc
of America or any of its correspondents  relative thereto.  No term or provision
of the  Agreement can be changed  orally,  and no executory  agreement  shall be
effective  to  modify  or to  discharge  the  Agreement  unless  such  executory
agreement is in writing and signed by Banc of America.

14. Jurisdiction and Waiver.

Applicant hereby  irrevocably  submits to the non-exclusive  jurisdiction of any
State or Federal  court  sitting in the city,  county,  or district in which the
principal  office of Banc of America is  located  over any action or  proceeding
arising out of or relating to the Agreement,  and Applicant  hereby  irrevocably
agrees that all claims in respect to such action or proceeding  may be heard and
determined in such State or Federal court.  Applicant hereby  irrevocably waives
to the fullest extent it may  effectively do so, the defense of an  inconvenient
forum to the  maintenance  of such action or proceeding and the lack of personal
jurisdiction.  To the fullest extent it may lawfully and effectively do so, each
of Applicant  and Banc of America  waives the right to trial by jury.  Applicant
irrevocably consents to the service of any and all process in any such action or
proceeding  by the mailing of copies of such  process to  Applicant  at the last
business  address  furnished by Applicant to Banc of America.  Applicant  agrees
that a final  judgment in any such action or proceeding  shall be conclusive and
may be enforced in other  jurisdictions  by suit on the judgment or in any other
manner provided by law. Nothing,  however,  in this Section 14, shall affect the
right of Banc of America to serve legal process in any other manner permitted by
law or affect the right of Banc of  America  to bring any  action or  proceeding
against  Applicant  or its  property  in the  courts of any other  jurisdiction.
<PAGE>
Moreover, to the extent that Applicant has or hereafter may acquire any immunity
from  jurisdiction  of any  court or from any  legal  process  (whether  through
service or notice, attachment prior to judgment,  attachment in aid of execution
or  otherwise)  with  respect  to  itself  or  its  property,  Applicant  hereby
irrevocably  waives  such  immunity  in  respect  of its  obligations  under the
Agreement.

15. Automatic Payment.

[ ] Applicant has elected to authorize Banc of America to effect payment of sums
due by Applicant  under the Agreement by means of debiting  Applicant's  account
number  _________________________.  This  authorization  shall  not  affect  the
obligation of Applicant to pay such sums when due, without notice,  if there are
insufficient  funds in such account to make such payment in full when due, or if
Banc of America fails to debit the account.

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