GROUP 1 AUTOMOTIVE INC, 10-Q, 1999-05-14

GROUP 1 AUTOMOTIVE INC
10-Q, 1999-05-14
AUTO DEALERS & GASOLINE STATIONS

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<PAGE> 1
FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1999

Commission file number: 1-13461

GROUP 1 AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)

Delaware 76-0506313
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

950 Echo Lane, Suite 350
Houston, Texas 77024
(Address of principal executive offices) (Zip code)

(713) 467-6268
(Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

Title Outstanding
----- -----------
Common stock, par value $.01 20,760,441

<PAGE> 2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS

CURRENT ASSETS:
Cash and cash equivalents ........................... $ 72,029 $ 66,443
Accounts and notes receivable, net .................. 22,022 21,373
Inventories, net .................................... 262,940 219,176
Deferred income taxes ............................... 12,212 11,212
Other assets ........................................ 6,291 8,718
---------- ----------
Total current assets ......................... 375,494 326,922
---------- ----------

PROPERTY AND EQUIPMENT, net ........................... 26,313 21,960
GOODWILL, net ......................................... 134,774 123,587
OTHER ASSETS .......................................... 8,215 5,241
---------- ----------
Total assets ................................. $ 544,796 $ 477,710
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Floorplan notes payable ............................. $ 158,761 $ 193,405
Current maturities of long-term debt ................ 424 2,966
Accounts payable and accrued expenses ............... 79,223 82,300
---------- ----------
Total current liabilities .................... 238,408 278,671
---------- ----------

DEBT, net of current maturities ....................... 1,058 42,821
SENIOR SUBORDINATED NOTES ............................. 97,791 --
OTHER LIABILITIES ..................................... 19,116 20,034

STOCKHOLDERS' EQUITY:
Preferred stock, 1,000,000 shares authorized, none
issued or outstanding ............................. -- --
Common stock, $.01 par value, 50,000,000 shares
authorized, 20,457,582 and 18,267,515 issued ...... 205 183
Additional paid-in capital .......................... 164,838 118,469
Retained earnings ................................... 24,347 18,190
Treasury stock, at cost, 43,669 and 37,366 shares ... (967) (658)
---------- ----------
Total stockholders' equity ................... 188,423 136,184
---------- ----------
Total liabilities and stockholders' equity ... $ 544,796 $ 477,710
========== ==========
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

2
<PAGE> 3

GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
------------ ------------
<S> <C> <C>
REVENUES:
New vehicle ......................................... $ 270,118 $ 138,022
Used vehicle ........................................ 159,779 87,119
Parts and service ................................... 43,774 21,568
Other dealership revenues, net ...................... 15,680 7,225
------------ ------------
Total revenues ............................... 489,351 253,934

COST OF SALES:
New vehicle ......................................... 247,373 127,376
Used vehicle ........................................ 146,148 80,560
Parts and service ................................... 19,636 9,978
------------ ------------
Total cost of sales .......................... 413,157 217,914

GROSS PROFIT .......................................... 76,194 36,020

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES ............................... 58,278 27,736

DEPRECIATION AND AMORTIZATION ......................... 2,091 819
------------ ------------

Income from operations ....................... 15,825 7,465

OTHER INCOME AND EXPENSES:
Floorplan interest expense .......................... (3,847) (1,824)
Other interest expense, net ......................... (1,786) (312)
Other income (expense), net ......................... 36 (23)
------------ ------------

INCOME BEFORE INCOME TAXES ............................ 10,228 5,306

PROVISION FOR INCOME TAXES ............................ 4,071 2,192
------------ ------------

NET INCOME ............................................ $ 6,157 $ 3,114
============ ============

Earnings per share:
Basic ............................................... $ 0.33 $ 0.21
Diluted ............................................. $ 0.31 $ 0.20

Weighted average shares outstanding:
Basic ............................................... 18,921,723 15,197,670
Diluted ............................................. 19,989,005 15,596,155
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

3
<PAGE> 4

GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................... $ 6,157 $ 3,114
Adjustments to reconcile net income to net cash provided
by operating activities -
Depreciation and amortization ................................. 2,091 819
Deferred income taxes ......................................... (150) (1,301)
Provision for doubtful accounts and uncollectible notes ....... 186 16
Changes in assets and liabilities -
Accounts receivable ......................................... (572) 1,273
Inventories ................................................. (31,439) (6,556)
Other assets ................................................ 326 (1,167)
Floorplan notes payable ..................................... 32,882 9,279
Accounts payable and accrued expenses ....................... 4,224 (1,734)
---------- ----------
Total adjustments ....................................... 7,548 629
---------- ----------
Net cash provided by operating activities ....... 13,705 3,743
---------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable ................................... (502) (705)
Collections on notes receivable ................................ 246 373
Purchases of property and equipment ............................ (8,914) (1,468)
Proceeds from sales of property and equipment .................. 5,729 2
Cash paid in acquisitions, net of cash received ................ (18,716) (14,318)
---------- ----------
Net cash used in investing activities ........... (22,157) (16,116)
---------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings under floorplan
facilities for acquisition financing ......................... (79,851) 19,998
Net payments on acquisition tranche of revolving credit facility (42,000) --
Principal payments of long-term debt ........................... (2,705) (1,630)
Borrowings of long-term debt ................................... 144 120
Proceeds from senior subordinated notes offering, net .......... 94,781 --
Proceeds from common stock offering, net ....................... 44,070 --
Proceeds from issuance of common stock to benefit plans ........ 242 --
Purchase of treasury stock ..................................... (643) (159)
---------- ----------
Net cash provided by financing activities ....... 14,038 18,329
---------- ----------

NET INCREASE IN CASH AND CASH EQUIVALENTS ......................... 5,586 5,956

CASH AND CASH EQUIVALENTS, beginning of period .................... 66,443 35,092
---------- ----------

CASH AND CASH EQUIVALENTS, end of period .......................... $ 72,029 $ 41,048
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for -
Interest ................................................. $ 5,425 $ 1,702
Taxes .................................................... $ 1,223 $ 1,910
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

4
<PAGE> 5

GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Group 1 Automotive, Inc. was founded to become a leading operator and
consolidator in the highly fragmented automotive retailing industry. Group 1
Automotive, Inc. is a holding company with no operations or assets, other than
its investments in its subsidiaries. These subsidiaries sell new and used cars
and light trucks, provide maintenance and repair services and arrange finance,
vehicle service and insurance contracts. Group 1 Automotive, Inc. and
Subsidiaries are herein collectively referred to as the "Company" or "Group 1".

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation/Reclassifications

All acquisitions completed during the periods presented have been
accounted for using the purchase method of accounting and their results of
operations are included from the effective dates of the closings of the
acquisitions. The allocations of purchase price to the assets acquired and
liabilities assumed are initially assigned and recorded based on preliminary
estimates of fair value and may be revised as additional information concerning
the valuation of such assets and liabilities becomes available. All significant
intercompany balances and transactions have been eliminated in consolidation.
Certain reclassifications have been made to prior year financial statements to
conform them to the current year presentation.

Interim Financial Information

These interim financial statements are unaudited, and certain information
normally included in financial statements prepared in accordance with generally
accepted accounting principles has not been included herein. In the opinion of
management, all adjustments necessary to fairly present the financial position,
results of operations and cash flows with respect to the interim financial
statements, have been properly included. Due to seasonality and other factors,
the results of operations for the interim periods are not necessarily indicative
of the results that will be realized for the entire fiscal year.

3. EARNINGS PER SHARE:

Statement of Financial Accounting Standards ("SFAS") No. 128 requires the
presentation of basic earnings per share and diluted earnings per share in
financial statements of public enterprises. Under the provisions of this
statement, basic earnings per share is computed based on weighted average shares
outstanding and excludes dilutive securities. Diluted earnings per share is
computed including the impacts of all potentially dilutive securities. The
following table sets forth the shares outstanding for the earnings per share
calculations:

5
<PAGE> 6

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
---------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Common stock outstanding, beginning of period ............ 18,267,515 14,673,051
Weighted average common stock issued -
Acquisitions ........................................ 60,644 537,952
Employee Stock Purchase Plan ........................ 20,297 --
Stock offering ...................................... 622,222 --
Less: Weighted average treasury shares repurchased ..... (48,955) (13,333)
------------ ------------

Shares used in computing basic earnings per share ........ 18,921,723 15,197,670

Dilutive effect of stock options, net of assumed
repurchase of treasury stock ........................ 1,067,282 398,485
------------ ------------

Shares used in computing diluted earnings per share ...... 19,989,005 15,596,155
============ ============
</TABLE>

4. BUSINESS COMBINATIONS

During the first three months of 1999, the Company acquired five
automobile dealership franchises. These acquisitions were accounted for as
purchases. The consideration paid in completing these acquisitions and in
settlement of certain contingent acquisition payment arrangements included
approximately $18.7 million in cash, net of cash received, approximately 190,000
shares of restricted/unregistered common stock and the assumption of an
estimated $12.1 million of inventory financing. The consolidated balance sheet
includes preliminary allocations of the purchase price of the acquisitions,
which are subject to final adjustment. These allocations resulted in recording
approximately $10.9 million of goodwill, which is being amortized over 40 years.

The following unaudited pro forma financial information consists of
income statement data from continuing operations as presented in the
consolidated financial statements plus (1) unaudited income statement data for
all acquisitions, completed before March 31, 1999, assuming that they occurred
on January 1, 1998 and (2) certain pro forma adjustments discussed below.

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
---- ----
(in millions, except per share amounts)
<S> <C> <C>
Revenues .............................................. $ 492.7 $ 423.2
Gross profit .......................................... 76.8 63.3
Income from operations ................................ 15.9 13.1
Net income ............................................ 6.2 4.5
Basic earnings per share .............................. 0.33 0.25
Diluted earnings per share ............................ 0.31 0.24
</TABLE>

Pro forma adjustments included in the amounts above primarily relate to:
(a) increases in revenues related to changes in the contractual commission
arrangements on certain third-party products sold by the dealerships; (b) pro
forma goodwill amortization expense over an estimated useful life of 40 years;
(c) reductions in compensation expense and management fees to the level that
certain management employees and owners of the acquired companies will
contractually receive; (d) incremental corporate overhead costs related to
personnel costs, rents, professional service fees and directors and officers
liability insurance premiums; (e) increases in interest expense resulting from
borrowings to complete acquisitions; and (f) incremental provisions for federal
and state income taxes relating to the compensation differential, S Corporation
income and other pro forma adjustments.

6
<PAGE> 7

5. SENIOR SUBORDINATED NOTES

The Company completed the offering of $100 million of its 10 7/8% Senior
Subordinated Notes due 2009 (the "Notes") on March 5, 1999. The Notes pay
interest semi-annually on March 1, and September 1, each year beginning
September 1, 1999. Before March 1, 2002, the Company may redeem up to $35
million of the Notes with the proceeds of certain public offerings of common
stock at a redemption price of 110.875% of the principal amount plus accrued
interest to the redemption date. Additionally, the Company may redeem all or
part of the Notes at redemption prices of 105.438%, 103.625%, 101.813% and
100.000% of the principal amount plus accrued interest during the twelve month
periods beginning March 1, of 2004, 2005, 2006, and 2007 and thereafter,
respectively. The Notes are jointly and severally guaranteed, on an unsecured
senior subordinated basis, by all subsidiaries of the Company (the "Subsidiary
Guarantors"), other than certain inconsequential subsidiaries. All of the
Subsidiary Guarantors are wholly owned subsidiaries of the Company. Certain
manufacturers have minimum working capital guidelines, which, under certain
circumstances, may impair a subsidiary's ability to make distributions to the
parent company. Separate financial statements of the Subsidiary Guarantors are
not included because (i) all Subsidiary Guarantors have jointly and severally
guaranteed the Notes on a full and unconditional basis, to the maximum extent
permitted by law, (ii) the aggregate assets, liabilities, earnings and equity of
the Subsidiary Guarantors are substantially equivalent to the assets,
liabilities, earnings and equity of the parent on a consolidated basis, and
(iii) management has determined that such information is not material to
investors.

6. SUBSEQUENT EVENT

The Company closed an amendment to its syndicated credit facility on May
11, 1999, increasing its credit facility to $500 million. The credit facility
consists of two tranches: the floorplan tranche and the acquisition tranche. The
acquisition tranche totals $110 million and, as of May 11, 1999, $110 million
was available, subject to a cash flow calculation and the maintenance of certain
financial ratios.

7
<PAGE> 8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following should be read in conjunction with the response to Part I,
Item 1 of this Report and our other filings with the Securities and Exchange
Commission ("SEC").

OVERVIEW

We are a leading operator and consolidator in the highly fragmented
automotive retailing industry. We own automobile dealership franchises located
in Texas, Oklahoma, Florida, New Mexico, Georgia and Colorado. At all of our
dealerships we sell new and used cars and light trucks, and provide maintenance
and repair services. We also operate 12 collision service centers. We expect a
significant portion of our future growth to come from acquisitions of additional
dealerships.

We have diverse sources of revenues, including: new car sales, new truck
sales, used car sales, used truck sales, manufacturer remarketed vehicle sales,
parts sales, service sales, collision repair service sales, finance fees,
insurance commissions, vehicle service contract commissions, documentary fees
and after-market product sales. Sales revenues from new and used vehicle sales
and parts and service sales include sales to retail customers, other dealerships
and wholesalers. Other dealership revenues includes revenues from arranging
financing, insurance and vehicle service contracts, net of a provision for
anticipated chargebacks, and documentary fees.

Our gross margin varies as our merchandise mix (the mix between new
vehicle sales, used vehicle sales, parts and service sales, collision repair
service sales and other dealership revenues) changes. Our gross margin on the
sale of products and services generally varies between approximately 7.5% and
85.0%, with new vehicle sales generally resulting in the lowest gross margin and
other dealership revenues generally resulting in the highest gross margin. When
our new vehicle sales increase or decrease at a rate greater than our other
revenue sources, our gross margin responds inversely. Factors such as
seasonality, weather, cyclicality and manufacturers' advertising and incentives
may impact our merchandise mix and, therefore, influence our gross margin.

Selling, general and administrative expenses consist primarily of
compensation for sales, administrative, finance and general management
personnel, rent, marketing, insurance and utilities. Interest expense consists
of interest charges on interest-bearing debt, including floorplan inventory
financing, net of interest income earned.

SELECTED OPERATIONAL AND FINANCIAL DATA

<TABLE>
<CAPTION>
NEW VEHICLE DATA
THREE MONTHS ENDED
(dollars in thousands, MARCH 31,
except per unit amounts) ---------
INCREASE/ PERCENT
1999 1998 (DECREASE) CHANGE
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Retail unit sales ........................... 11,324 5,972 5,352 89.6%
Retail sales revenues ....................... $ 270,118 $ 138,022 $ 132,096 95.7%
Gross profit ................................ $ 22,745 $ 10,646 $ 12,099 113.6%
Gross margin ................................ 8.4% 7.7% 0.7% 9.1%
Average gross profit per retail unit sold ... $ 2,009 $ 1,783 $ 226 12.7%
</TABLE>

8
<PAGE> 9

<TABLE>
<CAPTION>
USED VEHICLE DATA
THREE MONTHS ENDED
(dollars in thousands, MARCH 31,
except per unit amounts) ---------
INCREASE/ PERCENT
1999 1998 (DECREASE) CHANGE
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Retail unit sales ........................... 10,021 5,354 4,667 87.2%
Retail sales revenues(1) .................... $ 131,713 $ 70,976 $ 60,737 85.6%
Gross profit ................................ $ 13,631 $ 6,559 $ 7,072 107.8%
Gross margin ................................ 10.3% 9.2% 1.1% 12.0%
Average gross profit per retail unit sold ... $ 1,360 $ 1,225 $ 135 11.0%
</TABLE>

(1) Excludes wholesale revenues.

<TABLE>
<CAPTION>
PARTS AND SERVICE DATA
THREE MONTHS ENDED
(dollars in thousands) MARCH 31,
---------
INCREASE/ PERCENT
1999 1998 (DECREASE) CHANGE
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Sales revenue ............................... $ 43,774 $ 21,568 $ 22,206 103.0%
Gross profit ................................ $ 24,138 $ 11,590 $ 12,548 108.3%
Gross margin ................................ 55.1% 53.7% 1.4% 2.6%
</TABLE>

<TABLE>
<CAPTION>
OTHER DEALERSHIP REVENUES, NET
THREE MONTHS ENDED
(dollars in thousands, MARCH 31,
except per unit amounts) ---------
INCREASE/ PERCENT
1999 1998 (DECREASE) CHANGE
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Retail new and used unit sales .............. 21,345 11,326 10,019 88.5%
Retail sales revenues ....................... $ 15,680 $ 7,225 $ 8,455 117.0%
Net revenues per retail unit sold ........... $ 735 $ 638 $ 97 15.2%
</TABLE>

THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1998

REVENUES. Revenues increased $235.5 million, or 92.8%, to $489.4 million
for the three months ended March 31, 1999, from $253.9 million for the three
months ended March 31, 1998. New vehicle revenues increased primarily due to
strong customer acceptance of our products, particularly Acura, Lexus and Ford,
and the acquisitions of additional dealership operations during 1998 and 1999.
During the three months ended March 31, 1999, strong sales incentives and
advertising programs by the manufacturers enhanced the new vehicle sales efforts
of our dealerships. The growth in used vehicle revenues was primarily
attributable to an emphasis on used vehicle sales in the Oklahoma and Houston
markets, and the additional franchise operations acquired. The increase in parts
and service revenues was due significantly to the additional dealership
operations acquired, coupled with strong growth in the Houston and Beaumont
markets. Other dealership revenues increased primarily due to the implementation
of our vehicle service contract and insurance programs, and related training,
which resulted in improved revenues per unit, and an increase in the number of
retail new and used vehicle sales.

GROSS PROFIT. Gross profit increased $40.2 million, or 111.7%, to $76.2
million for the three months ended March 31, 1999, from $36.0 million for the
three months ended March 31, 1998. The increase was attributable to increased
revenues and an increased gross margin to 15.6% for the three months ended

9
<PAGE> 10

March 31, 1999, from 14.2% for the three months ended March 31, 1998. The
increase in gross margin was caused primarily by improvements in other
dealership revenues per unit and increases in the gross margin earned on new and
used vehicle sales and parts and service sales. Additionally, changes in the
merchandising mix, higher margin parts and service sales and other dealership
revenues increased as a percentage of total revenues, added to the gross margin
improvement. The gross margin on new retail vehicle sales improved to 8.4% from
7.7%, due significantly to strong manufacturer sales incentive and advertising
programs during the quarter. The increase in gross margin on used retail vehicle
sales to 10.3% from 9.2% was primarily attributable to an emphasis on used
vehicles, particularly inventory management.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $30.6 million, or 110.5%, to $58.3 million for
the three months ended March 31, 1999, from $27.7 million for the three months
ended March 31, 1998. The increase was primarily attributable to the additional
dealership operations acquired and increased variable expenses, particularly
incentive pay to employees, which increased as revenues and gross profit
increased. Selling, general and administrative expenses decreased as a
percentage of gross profit to 76.5% from 77.0% as dealership managers were able
to control costs while improving sales and gross profit.

INTEREST EXPENSE. Floorplan and other interest expense, net, increased
$3.5 million, or 166.7%, to $5.6 million for the three months ended March 31,
1999, from $2.1 million for the three months ended March 31, 1998. The increase
was primarily attributable to the floorplan interest expense of the additional
dealership operations acquired and additional interest expense due to borrowings
to complete acquisitions. A portion of the increase is due to the completion of
our offering of $100 million of senior subordinated notes during the first
quarter of 1999. Until all the proceeds of the offering are utilized in
completing acquisitions, we are using the funds to temporarily pay down our
floorplan notes payable, which have a lower interest rate than the long-term
senior subordinated notes. Partially offsetting the increases were cost
reductions realized as we obtained a lower interest rate on floorplan notes
payable through our credit facility.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are cash on hand, cash from
operations, our credit facility, which includes the floorplan facility and the
acquisition facility, and equity and debt offerings.

CASH FLOWS

OPERATING ACTIVITIES. During the first three months of 1999 we generated
cash flow from operations of approximately $13.7 million, primarily from net
income plus depreciation, an increase of $10.0 million compared to the same
period in the prior year.

INVESTING ACTIVITIES. During the first three months of 1999 we used
approximately $22.2 million for investing activities, primarily related to cash
paid in completing acquisitions, net of cash balances obtained in the
acquisitions. Additionally, we paid $8.9 million for purchases of property and
equipment, of which $7.3 million was used for the purchase of land and
construction of facilities for new or expanded operations, including the new
Lexus companion dealership located in south Houston. Partially offsetting these
uses of cash, we received $5.7 million from sales of property and equipment. The
proceeds were received primarily from the sale of dealership properties to a
REIT for approximately $5.5 million.

FINANCING ACTIVITIES. During the first three months of 1999 we obtained
approximately $14.0 million from financing activities. In March 1999, we
completed offerings of 2 million shares of common stock and $100 million of
senior subordinated notes with an interest rate of 10 7/8%. The proceeds of
approximately $138.9 million were used to repay $59.0 borrowed under the
acquisition portion of the credit facility and approximately $79.9 million of
floorplan notes payable. The amounts paid down on the credit facility are

10
<PAGE> 11

expected to be drawn in the future to complete acquisitions. Additionally, in
connection with the sale of the properties to a REIT, we paid off mortgages of
approximately $2.5 million.

WORKING CAPITAL. At March 31, 1999, we had working capital of $137.1
million. Historically, we have funded our operations with internally generated
cash flow and borrowings. Certain manufacturers have minimum working capital
guidelines, which, under certain circumstances, may impair a subsidiary's
ability to make distributions to the parent company. While we cannot guarantee
it, based on current facts and circumstances, we believe we have adequate cash
flows coupled with borrowings under our credit facility to fund our current
operations.

CREDIT FACILITY

We closed an amendment to our credit facility on May 11, 1999, increasing
the credit facility to $500 million. The credit facility consists of two
tranches: the floorplan tranche and the acquisition tranche. The acquisition
tranche totals $110 million and, as of May 11, 1999, $110 million was available,
subject to a cash flow calculation and the maintenance of certain financial
ratios.

ACQUISITION FINANCING

We anticipate that our primary use of cash will be for the completion of
acquisitions. We expect the cash needed to complete our acquisitions will come
from the operating cash flows of our existing dealerships, borrowings under our
credit facilities, other borrowings, or equity or debt offerings. Although we
believe that we will be able to obtain sufficient capital to fund acquisitions,
we cannot guarantee that such capital will be available to us at the time it is
required or on terms acceptable to us.

YEAR 2000 CONVERSION

Year 2000 issues result from the inability of computer programs or
computerized equipment to accurately calculate, store or use a date subsequent
to December 31, 1999. The erroneous date can be interpreted in a number of
different ways; typically the year 2000 is represented as the year 1900. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.

We have recognized the need to ensure that our computer systems,
equipment and operations will not be adversely impacted by the change to the
calendar year 2000. As such, we have taken steps to identify potential areas of
risk and are addressing these in our planning, purchasing and daily operations.
We have conducted a third party survey of all of the individual dealership
systems, equipment and operations and have developed an action plan, which is
currently being implemented, to correct deficiencies before year-end. The total
cost of converting all internal systems, equipment and operations for the year
2000 has not been fully quantified, but is not expected to be material to our
financial position. In connection with acquisitions, we review and address each
candidate's year 2000 readiness during the due diligence process.

We are currently reviewing the potential adverse impact, resulting from
the failure of third party service providers and vendors to prepare for the year
2000. We are dependent upon our dealerships' computer systems in our daily
operations. All of our dealerships are, or are expected, by year-end, to be,
using a computer system supported by a major automobile dealership computer
system provider. We have contacted each of our providers and have received
written assurance from them that their systems are, or will be, year 2000 ready.
We are dependent upon these providers, as are most dealerships in the United
States, to address the year 2000 issue.

We are primarily dependent upon the manufacturers for the production and
delivery of new vehicles and parts. Although we have no reason to believe that
our manufacturers will not be year 2000 ready, we have been unable to obtain
written assurance from them that their systems are year 2000 ready.

While we are in the process of developing contingency plans, failure by
us, our manufacturers or third party service providers and vendors to adequately
address the year 2000 issue could have an

11
<PAGE> 12

adverse effect on us. If we or our third party service providers do not
adequately address the year 2000 issue, we may be required to handle all
business on a handwritten basis. While this would reduce operational efficiency,
we would still be able to continue our operations. If our manufacturers fail to
adequately address the year 2000 issue, and do not correct the problems timely,
we may experience shortages in new vehicle and parts inventories.

CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS

This quarterly report and Management's Discussion and Analysis of
Financial Condition and Results of Operations include certain "forward-looking
statements" within the meeting of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements include
statements regarding our plans, beliefs or current expectations, including those
plans, beliefs and expectations of our officers and directors with respect to,
among other things:

o future acquisitions;

o expected future cost savings;

o future capital expenditures;

o trends affecting our future financial condition or results of
operations; and

o our business strategy regarding future operations.

Any such forward-looking statements are not assurances of future
performance and involve risks and uncertainties. Actual results may differ
materially from anticipated results for a number of reasons, including;

o industry conditions;

o future demand for new and used vehicles;

o restrictions imposed on us by automobile manufacturers;

o the ability to obtain the consents of automobile manufacturers to
our acquisitions;

o the availability of capital resources; and

o the willingness of acquisition candidates to accept our common
stock as currency.

This information and additional factors that could affect our operating
results and performance are described in our filings with the SEC. We urge you
to carefully consider those factors.

12
<PAGE> 13

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, our dealerships are named in claims involving the
manufacture of automobiles, contractual disputes and other matters arising in
the ordinary course of business. Currently, no legal proceedings are pending
against or involve us that, in our opinion, based on current known facts and
circumstances, could reasonably be expected to have a material adverse effect on
our financial position.

ITEM 2. CHANGES IN SECURITIES

We have entered into agreements to purchase all of the outstanding
capital stock or purchase certain assets and assume certain liabilities of
various automobile dealerships for cash and shares of our common stock. The
following is a summary of the transactions in which stock was or is to be
issued:

<TABLE>
<CAPTION>
DATE SECURITIES
DATE OF AGREEMENT ISSUED ACQUISITION SHARES
- ------------------- ----------------- ----------------------------- ---------
<S> <C> <C> <C>
December 17, 1997 March 24, 1999 Carroll Automotive Group 20,981
February 25, 1998 March 15, 1999 Johns Automotive Group 151,260
November 20, 1998 February 4, 1999 Sunshine Buick, Pontiac, GMC 17,826
November 25, 1998 April 14, 1999 Tidwell Ford 346,558
January 25, 1999 Pending closing Messer Automotive Group 548,647
March 10, 1999 Pending closing Sansing Automotive Group 529,332
</TABLE>

We are relying on Regulation D under the Securities Act of 1933, as
amended, as an exemption from registration of the Common Stock to be issued in
the acquisitions. We believe we are justified in relying on such exemption since
all but four stockholders of the groups who have or will receive shares of our
common stock are "accredited investors" under Regulation D, and we have
otherwise complied with Regulation D.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

A. EXHIBITS:

10.1 Second Amendment to Group 1 Automotive, Inc. 1996 Stock Incentive
Plan

10.2 Asset purchase agreement by and among Delaware Acquisitions-F,
L.L.C., a wholly owned subsidiary of Group 1 Automotive, Inc.,
and Gene Messer Ford of Amarillo, Inc. dated January 25, 1999.

10.3 Asset purchase agreement by and among Delaware Acquisitions-CC,
L.L.C., a wholly owned subsidiary of Group 1 Automotive, Inc.,
Delaware Acquisitions-GM, L.L.C., a wholly owned subsidiary of
Group 1 Automotive, Inc., and Gene Messer Cadillac, Inc. dated
January 25, 1999.

10.4 Asset purchase agreement by and among Delaware Acquisitions-F,
L.L.C., a wholly owned subsidiary of Group 1 Automotive, Inc.,
and Gene Messer Ford, Inc. dated January 25, 1999.

10.5 Asset purchase agreement by and among Delaware Acquisitions-T,
L.L.C., a wholly owned subsidiary of Group 1 Automotive, Inc.,
and Messer, Wessels and Messer, Inc. dated January 25, 1999.

10.6 Asset purchase agreement by and among Delaware Acquisitions-F,
L.L.C., a wholly owned subsidiary of Group 1 Automotive, Inc.,
and Rockwall Ford-Mercury, Ltd. dated January 25, 1999.

13
<PAGE> 14

10.7 Asset purchase agreement by and among Lubbock Automotive-M, Inc.,
a wholly owned subsidiary of Group 1 Automotive, Inc., and
Gene Messer Imports, Inc. dated January 25, 1999.

11.1 Statement re: computation of earnings per share is included under
Note 3 to the financial statements.

27.1 Financial Data Schedule.

B. REPORTS ON FORM 8-K:

On January 25, 1999, the Company filed a Current Report of Form 8-K
reporting under Item 5 thereof and including exhibits under Item 7
thereof.

On January 26, 1999, the Company filed a Current Report of Form 8-K
reporting under Item 5 thereof and including exhibits under Item 7
thereof.

On February 5, 1999, the Company filed a Current Report of Form 8-K
reporting under Item 5 thereof and including exhibits under Item 7
thereof.

On February 24, 1999, the Company filed a Current Report of Form 8-K
reporting under Item 5 thereof and including exhibits under Item 7
thereof.

On March 5, 1999, the Company filed a Current Report of Form 8-K
reporting under Item 5 thereof and including exhibits under Item 7
thereof.

14
<PAGE> 15

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Group 1 Automotive, Inc.

May 14, 1999 By: /s/ Scott L. Thompson
- ------------ ----------------------------------------
Date Scott L. Thompson, Senior Vice President,
Chief Financial Officer and Treasurer

15
<PAGE> 16

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.1 Second Amendment to Group 1 Automotive, Inc. 1996 Stock Incentive
Plan

10.2 Asset purchase agreement by and among Delaware Acquisitions-F, L.L.C., a
wholly owned subsidiary of Group 1 Automotive, Inc., and Gene
Messer Ford of Amarillo, Inc. dated January 25, 1999.

10.3 Asset purchase agreement by and among Delaware Acquisitions-CC, L.L.C.,
a wholly owned subsidiary of Group 1 Automotive, Inc., Delaware
Acquisitions-GM, L.L.C., a wholly owned subsidiary of Group 1
Automotive, Inc., and Gene Messer Cadillac, Inc. dated January 25,
1999.

10.4 Asset purchase agreement by and among Delaware Acquisitions-F, L.L.C., a
wholly owned subsidiary of Group 1 Automotive, Inc., and Gene
Messer Ford, Inc. dated January 25, 1999.

10.5 Asset purchase agreement by and among Delaware Acquisitions-T, L.L.C., a
wholly owned subsidiary of Group 1 Automotive, Inc., and Messer,
Wessels and Messer, Inc. dated January 25, 1999.

10.6 Asset purchase agreement by and among Delaware Acquisitions-F, L.L.C., a
wholly owned subsidiary of Group 1 Automotive, Inc., and Rockwall
Ford-Mercury, Ltd. dated January 25, 1999.

10.7 Asset purchase agreement by and among Lubbock Automotive-M, Inc., a wholly
owned subsidiary of Group 1 Automotive, Inc., and Gene Messer
Imports, Inc. dated January 25, 1999.

11.1 Statement re: computation of earnings per share is included under
Note 3 to the financial statements.

27.1 Financial Data Schedule.
</TABLE>

<PAGE> 1
EXHIBIT 10.1

SECOND AMENDMENT TO
GROUP 1 AUTOMOTIVE, INC.
1996 STOCK INCENTIVE PLAN

WHEREAS, GROUP 1 AUTOMOTIVE, INC. (the "Company") has heretofore
adopted the GROUP 1 AUTOMOTIVE, INC. 1996 STOCK INCENTIVE PLAN (the "Plan"); and

WHEREAS, the Company desires to amend the Plan in certain respects;

NOW, THEREFORE, the Plan shall be amended as follows:

1. The second sentence of Paragraph V(a) of the Plan shall be deleted
and replaced with the following:

"Subject to adjustment in the same manner as provided in
Paragraph IX with respect to shares of Common Stock subject to
Options then outstanding, the aggregate number of shares of
Common Stock that may be issued under the Plan shall not
exceed 3,000,000 shares."

2. This Second Amendment to the Plan shall be effective as of February
24, 1999; provided that this Second Amendment to the Plan is approved by the
stockholders of the Company within 12 months thereafter.

3. As amended hereby, the Plan is specifically ratified and reaffirmed.

<PAGE> 1
EXHIBIT 10.2

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Gene Messer Ford of Amarillo, Inc., a Texas corporation ("Seller"), and
Delaware Acquisitions - F, L.L.C., a Delaware limited liability company
("Purchaser").

EXPLANATORY STATEMENT

WHEREAS, Seller is presently a party to a Sales and Service Agreement with
Ford Motor Company ("Ford") ("Manufacturer"); which provide for the sale and
service of Ford vehicles ("Dealership") at 3400 Soncy, Amarillo, Texas 79119
(the "Dealership Location"); and

WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Ford dealer at the
Dealership Location.

WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;

WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;

WHEREAS, the Companies are dependent on each other for management skills,
training, "best practices," and economies of scale, and the Seller could not
operate its business effectively without the benefits it receives from the other
Companies;

WHEREAS, while the parties have allocated the value of the goodwill among
the Companies based upon an objective formula, the effect of each Company on the
combined goodwill of all of the Companies as a group is significantly greater
than the goodwill allocated to each Company separately;

WHEREAS, the Seller would not sell the Assets to Purchaser unless Purchaser
continues the existing relationships among the Companies and Purchaser and
affiliates buy substantially all of the assets of the Companies;

WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;

WHEREAS, it is the expectation of both Seller and Purchaser and a material
term of this Agreement that substantially all of the assets of all of the
Companies will be controlled by one entity and their names, local management,
employees and goodwill be preserved;

NOW, THEREFORE, in consideration of the above premises and the mutual
promises set forth in this Agreement, the receipt and sufficiency of which are
hereby acknowledged, the Seller and Purchaser hereby agree as follows and each
of the Companies agrees as set forth in separate agreements (the "Related
Agreements") of even date herewith, with each purchaser under each Related
Agreement, all of which are conditioned on the purchase by Purchaser or
affiliates of substantially all of the assets of the Companies, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

1. Earnest Money. Purchaser has delivered to Seller the Earnest Money
deposit of Fifty Thousand and No/100 Dollars ($50,000.00). If the transactions
contemplated by this Agreement are consummated, the Earnest Money shall be
delivered to Seller at Closing (as hereinafter defined) and applied against the
Purchase Price. If sale fails to close for any reason other than Purchaser's
default, the Earnest Money shall be refunded to Purchaser. If Purchaser elects
not to close for any reason other than: (i) Seller's default; or (ii) failure to
satisfy the approvals required in Section 4.1, below; the Earnest Money shall be
paid to Seller as full and complete liquidated damages in full relief and
discharge of any and all obligations of Purchaser hereunder. Upon execution of
this Agreement, Purchaser has delivered to Seller, and Seller acknowledges
receipt of, One Hundred and no/100 Dollars ($100.00) (the "Independent
Consideration"), as consideration for Purchaser's right to purchase the Assets
and for Seller's execution, delivery and performance of this

-1-
<PAGE> 2
Agreement. The Independent Consideration is in addition to and independent of
any other consideration or payment provided for in this Agreement, is
non-refundable and shall be retained by Seller notwithstanding any other
provision of this Agreement.

2.1. Purchase Price. The purchase price for the Assets to be sold and
transferred by Seller to Purchaser shall be the total of the items listed in
Sections 2.1.1. through 2.1.10. (collectively, the "Purchase Price"):

2.1.1. Purchaser agrees to purchase all new, unused and undamaged
current model year motor vehicles with less than Six Thousand
(6,000) miles in Seller's inventory at the Closing Date (as
hereinafter defined). Vehicles with more than Six Thousand
(6,000) miles shall be considered used and sold pursuant to
the terms of Section 2.1.2, below. Purchaser shall pay factory
invoice, less: holdback, floor plan assistance or interest
credits, model year change-over allowances, full fuel tank
reimbursement, or other manufacturer allowances or incentives
paid or payable to Seller. Vehicles in inventory which
previously have been delivered to a customer together with the
Manufacturer's Certificate of Origin ("MCO") (e.g. "unwinds"
or "back-outs") shall be considered used cars and sold
pursuant to the terms of section 2.1.2, below. Seller will
furnish proper documentation (including an "R.D.R. card",
"sale card," or comparable documentation) to Purchaser so that
Purchaser may subsequently sell, transfer and register such
vehicles as new vehicles. Seller shall disclose all damage as
well as any repairs made to any vehicle. Any vehicle
previously damaged, even if repaired, if the cost of repairing
such damage exceeds or has exceeded Five Hundred Dollars
($500), shall be considered used cars and sold pursuant to the
terms of section 2.1.2, below. Installed accessories shall be
purchased at actual dealer cost, except Purchaser shall not
pay for rust-proofing, undercoating, scotch-guarding,
non-Manufacturer alarm systems, interrupt systems, theft
prevention devices and similar dealer additions. A list of new
vehicles together with the information to calculate the
Purchase Price, will be provided to Purchaser at least Five
(5) days prior to the Closing Date.

2.1.2. Purchaser will purchase all of the used vehicle inventory of
Seller, which are less than Seventy Five (75) days old, at the
book value of the vehicles, as reflected on Seller's books,
less the "Pack" added to the book value of the vehicles by
Seller. Purchaser will purchase all of the used vehicle
inventory of Seller, which is more than Seventy Five (75) days
old, at the current wholesale market value of the vehicles as
determined by the Purchaser, provided that Seller may retain
any of said used vehicles if Seller is not satisfied with the
valuation established. Seller shall deliver titles to all used
vehicles within One Hundred Twenty (120) days after the
Closing Date. Seller guarantees the delivery of the used car
titles to Purchaser. If Seller is unable to deliver the title
to a vehicle within One Hundred Twenty (120) days after the
Closing Date, Seller will repurchase the vehicle.

2.1.3. Purchaser agrees to purchase Seller's actual verifiable
inventory of new, unused, undamaged and non-obsolete
Manufacturer's parts and accessories. Purchase Price will be
those dealer prices in accordance with the Manufacturer's
Price Schedules in effect on the Closing Date. Seller shall
assign to Purchaser the termination rights provided by each
Manufacturer's Sales and Service Agreement, to the extent same
exist or are assignable. In the alternative, Seller agrees to
allow Purchaser to exercise any and all Seller's termination
rights in Seller's name.

2.1.4. Purchaser agrees to purchase Seller's actual verifiable
inventory of after-market parts and accessories. The Purchase
Price will be the dealer's actual cost.

2.1.5. Purchaser agrees to purchase Seller's work in process for an
amount equal to Seller's actual cost for sublet repairs and
Seller's internal rate for labor and parts, as reflected on
outstanding repair orders as of the Closing Date.

2.1.6. Purchaser shall purchase all oil and grease in Seller's
possession at Seller's cost.

-2-
<PAGE> 3

2.1.7. Purchaser shall purchase from Seller all of the fixed assets
including all machinery and shop equipment, special tools,
parts and accessories equipment, furniture and fixtures, and
company vehicles. Purchaser shall purchase the fixed assets of
Seller listed in SCHEDULE 2.1 ("Fixed Asset List") attached
hereto, for Three Hundred Sixteen Thousand Nine Hundred
Seventy Six and no/100 Dollars ($316,976.00). The Fixed Asset
List shall be deemed to include all fixed assets located at
the Dealership Location, even if omitted from SCHEDULE 2.1,
unless said asset is specifically listed on SCHEDULE 2.2
("Retained Assets") attached hereto, in which case the asset
shall be retained by Seller. Seller agrees to provide
Purchaser with SCHEDULES 2.1 and SCHEDULE 2.2 for attachment
hereto, on or before March 15, 1999.

2.1.8. Seller will transfer to Purchaser all parts catalogues,
service manuals, films, videos, instructional materials,
vehicle literature, supplies and other assets used in the
sales or service of Ford vehicles and used vehicles ("Other
Assets") (specifically excluding Retained Assets") whether or
not such assets are considered fixed assets or are reported as
such on Seller's books and records or listed on the attached
SCHEDULE 2.1. Purchaser shall purchase the Other Assets of
Seller for Five Thousand and no/100 Dollars ($5,000.00).

2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations
for the computer, telephone, copier, and manufacturer required
leased equipment. In addition,Purchaser will assume other
leases not otherwise described above with a total monthly
obligation not to exceed One Thousand and no/100 Dollars
($1,000.00) per month, in the aggregate. A copy of the lease
agreements and contract listed on SCHEDULE 2.4, together with
any amendments thereto, shall be delivered to Purchaser as
soon as practical after execution of this Agreement. Seller
agrees to provide Purchaser with SCHEDULE 2.4 for attachment
hereto, on or before March 15, 1999.

2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's
telephone numbers. Purchaser shall receive all sales and
service files and parts records, customer lists, computer
files containing sales and service files, parts records and
customer lists and all other information and documents which
are necessary and/or which might be useful in the furtherance
of the dealership business (Seller shall retain its employee
personnel files, general ledgers, sub-ledgers, canceled
checks, journals, vouchers, tax returns and other accounting
ledgers.). Purchaser agrees to pay Seller for the goodwill,
the sum of Ten Million Three Hundred Twenty Eight Thousand Six
Hundred Ten and No/100 Dollars ($10,328,610.00).

2.2. Liens and Encumbrances. All Assets will be transferred free of
any liens or encumbrances, except for the obligations which Purchaser agrees to
assume, as listed on the attached Schedule 2.3 ("Assumed Liabilities").

3. Supplemental Agreements.

3.1. Maintenance of Business Prior to Closing. Seller agrees that
prior to Closing it shall operate its business in a manner consistent with prior
business practice. In connection therewith, the parties agree that Seller may
dealer trade vehicles for similar models, but Seller shall not liquidate or
otherwise dispose of any of its new vehicles other than in the ordinary course
of business to retail buyers. Seller agrees to maintain its advertising
expenditures and activities commensurate with prior business practices. Seller
shall not advertise a "Going Out of Business" sale. Seller agrees to pay (or
contest, if disputed) Seller's trade payables, including Seller's telephone and
yellow pages bills, through the Closing Date. All revenue and expenses prior to
Closing shall be the benefit and burden of Seller.

3.2. Seller's Name. Seller shall assign all rights to the name
"Gene Messer Ford" to Purchaser. Purchaser may not assign this Agreement or any
right hereunder to any unrelated third party. Seller values its name and
reputation in the community, has investigated Group 1 and its management and
believes that Group 1 and Purchaser will preserve and carry forward the name and
reputation that Seller, and its primary owner, Gene Messer, whose name is used
in the business, has established in its community for many years. Purchaser and
Group 1 agree that it will not assign this Agreement or any rights hereunder to
any unrelated third party, and in the event that substantially all of the assets
of the Dealership or the equity ownership of the Dealership are acquired by any
party other than Group 1 or an entity controlled by Group 1, the name "Messer"
shall immediately cease to be used in the promotion and name of the dealership
so acquired by the third party. In the event there is an adverse change in the
operations to the extent that the integrity of the name Gene Messer is impacted,
Seller shall have the opportunity to request the Board of Directors of

-3-
<PAGE> 4

Group 1 ("Board"), that the name "Messer" be removed from the dealership within
a reasonable period of time. After due consideration of the facts and
circumstances of this request, the decision of the Board will be final.

3.3. Prepaids. Seller shall retain all prepaid accounts, provided
however, that Seller and Purchaser may review the prepaid accounts and transfer
any such prepaid accounts as they determine mutually beneficial, at the amount
agreed to by them.

3.4. Liabilities. Purchaser is not assuming the floor plan
liabilities of Seller. As of the Closing Date, Seller and Purchaser shall obtain
the complete release and discharge of the floor plan liability secured by liens
on vehicles or other assets conveyed under this Agreement. Purchaser is not
assuming any other liabilities of Seller, except as otherwise provided herein.

3.5. Retail Orders. On the Closing Date, Seller shall turn over or
assign by proper and appropriate instruments to Purchaser all unfulfilled retail
orders and customer deposits attributable thereto, held by Seller as of the
Closing Date. Purchaser shall assume such retail orders and responsibility to
the customer for making future delivery of any vehicle covered by the orders.

3.6. Allocation of Purchase Price. Purchaser and Seller agree that
the purchase price is allocated for the purposes of Section 1060 of the Internal
Revenue Code 1986, as amended, in accordance with the value set forth for each
class of asset and for each corporation, as listed on the attached EXHIBIT "A"
("Allocation of Purchase Price"). The parties hereto agree that each of them
will timely file with the Internal Revenue Service Form 8594 and that all tax
returns or other tax information any party hereto files or cause to be filed
with any governmental agency including the Internal Revenue Service, will be
prepared in a manner that is consistent with this section.

3.7. Property Taxes. All real and personal property taxes on
property owned or leased by Seller, which are not covered by the VIT (as
hereinafter defined), for the current year shall be prorated to the Closing
Date. If the amount of property taxes for the current tax year has not been
fixed by the Closing Date, the proration of such taxes shall be based upon the
preceding tax year's assessment. Purchaser shall receive the prorated taxes and
shall pay the full tax amount when due. Purchaser shall collect and remit the
"vehicle inventory tax" under Section 23.122 of the Texas Property Tax Code
("VIT") on each vehicle sold by Purchaser after the Closing Date through
December 31, 1999. All such remittances shall be applied to the 1999 VIT
liability of the Dealership. If the aggregate of all remittances is not
sufficient to fully discharge Dealership's liability, Seller shall be liable for
the balance of tax owing.

3.8. Information Releases. Purchaser and the Seller will jointly
prepare and issue all releases of information relating to the sale. Subject to
the prior sentence, if inquiries are made by any person with respect to any
transaction contemplated by this Agreement, Seller and Purchaser will consult
each other prior to responding to such inquiries.

3.9. Business Records. Seller shall not copy or remove any of the
records described in Section 2.10 from the dealership premises prior to the
Closing Date and shall return any of such records previously removed. Seller
agrees that such information is extremely important to Purchaser and promises to
retain such information in strict confidence and will not disclose any such
information to Purchaser's competitors or other parties. Purchaser agrees that
Purchaser will retain such information for a period not less than seven (7)
years after the Closing Date and that Seller and Seller's representatives may
have access to review and copy such information during Purchaser's regular
business hours if such information is necessary for Seller's business purposes.
Purchaser and its representatives may have access to review and copy any records
retained by Seller during Seller's regular business hours if such information is
necessary in Purchaser's operation of the dealership business after Closing.
Seller agrees to remove all retained records from the Dealership Location with
thirty (30) days after the Closing Date. If Purchaser wishes to destroy any of
the business records transferred by Seller, within Seven (7) years of the
Closing Date, Purchaser shall notify Seller prior to such destruction, in order
that Seller may retain such records.

3.10. Access of Purchaser. During the period from the date of this
Agreement to the Closing Date, Purchaser shall have full and free access to the
offices, property, records, files, books of account and tax returns of Seller
insofar as they relate to the Dealership business (save and except employee
files), through Seller's employees, independent public accountants and outside
consultants; provided however, that such access shall be conducted at a mutually
convenient time to be determined by Purchaser and Seller, during normal business
hours and in a manner that does not unreasonably interfere with Seller's normal
operations and employee relations.

-4-
<PAGE> 5

3.11. Confidentiality. Group 1, Purchaser, Seller and Stockholders agree,
and they agree to cause their officers, directors, employees, representatives
and consultants, to hold in confidence and not to disclose to others for any
reason whatsoever, any and all non-public information received by it or its
representatives in connection with this transaction, including but not limited
to all terms, conditions and agreements related to this transaction, except (i)
as required by law; and (ii) for disclosure to officers, directors, employees,
attorneys, accountants and other representatives of Seller as necessary in
connection with the transactions contemplated hereby or as necessary to the
operation of Seller's business. In the event the transactions contemplated by
this Agreement are not consummated, Seller will return all non-public documents
and other material obtained from Purchaser or its representatives in connection
with the transactions contemplated hereby or certify to Purchaser that all such
information has been destroyed. Neither party will make a public statement
without the other parties consent.

3.12. Post Closing Accounting. Purchaser and Seller agree that if
subsequent to Closing either party receives any funds (including credits on
accounts) to which the other party is entitled, such party will immediately pay
such amounts to the other party. Purchaser will assist Seller with the
collection of Seller's receivables. Purchaser and Seller will cooperate to
pro-rate all billings received by either party, which include charges applicable
to both Purchaser and Seller. Purchaser further agrees: (i) that if subsequent
to Closing Purchaser receives any amounts of money to which any Seller is
entitled, such as, but not limited to, manufacturer payments relative to
warranty work or holdback, Purchaser will immediately make payment to such
Seller of any such amount; and (ii) to assist each Seller in collecting any
amounts due and owing to such Seller from the applicable manufacturer, such as
for warranty work or holdbacks.

3.13. Termination. Seller, at no further cost or expense, may terminate
this Agreement if at any time after the date first written above and prior to
the Closing Date, the closing price of the Group 1 Automotive, Inc. ("Group 1")
Common Stock on the New York Stock Exchange is less than Five and no/100 Dollars
($5.00) per share (as adjusted for splits).

3.14. Finance Reserves. Purchaser shall receive all finance reserves, if
any, and shall assume responsibility for all chargebacks of unearned finance
income, vehicle service contracts and credit life insurance, other than
chargebacks from default or early payoff prior to the customer making three (3)
regular installment payments under the agreement.

3.15. Stock Options. An integral consideration for this Agreement and the
Related Agreements is the post-closing acceptance of non-dealer ownership of the
employer by select employees of Seller. To aid in this employee acceptance of
the change in ownership of employer, Group 1 agrees to make available to
selected employees options to acquire Group 1 common stock on the same basis as
employees of its other dealerships. The numbers of such options will be
consistent with the numbers of options awarded to other similarly sized Group 1
owned dealerships. Nothing herein shall be construed to mean that any employee
is entitled to, or will receive, any stock options.

3.16. Expenses. Regardless of whether the transaction contemplated herein
is consummated, all costs and expenses in connection with this Agreement and the
transactions contemplated hereby incurred by Purchaser shall be paid by
Purchaser and all such costs and expenses incurred by Sellers and Stockholders
shall be paid by the Sellers; provided, however, that Group 1 shall pay for all
costs associated with (i) preparation of the HSR Act filing and the HSR filing
fees; and (ii) application and approval process with the Manufacturer.

3.17. Right of First Refusal. If within Ten (10) years of the Closing Date,
Purchaser agrees to transfer the Sales and Service Agreement for Ford
("Franchise") to an independent third party (an entity not owned or controlled
by Group 1), in a transaction that is not part of the Manufacturer's channelling
or alignment programs (e.g. "Project 2000"), any such agreement shall be subject
to the terms and provisions of this Section 3.17 and Seller shall have the right
of first refusal upon such assets transferred. If Purchaser enters into an
agreement to transfer the Franchise ("Transfer Agreement") in a transaction
which is subject to this right of first refusal, then Purchaser shall deliver a
copy of the Transfer Agreement together with the financial and operating
information provided to the prospective transferee, to Seller ("Notice"). Seller
will have thirty (30) days from the Notice date to exercise Seller's right to
assume the prospective transferee's position under the Transfer Agreement. If
Seller exercises the right of first refusal, Seller must comply with all terms,
conditions and covenants of the Transfer Agreement. If Seller does not respond
to the Notice within thirty (30) days it will be deemed refused by Seller. If
Seller does not exercise the right of first refusal, then Purchaser may complete
the transaction contemplated in the Transfer Agreement, upon the terms and
conditions contained therein. If Purchaser does not close the transaction
contemplated in the Transfer Agreement within One Hundred Eighty (180) days,
then Seller's right of first refusal on such assets shall be reinstated.

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<PAGE> 6

3.18. Benefit Plans. Group 1 shall cause the employee benefit plans and
programs maintained after the Closing Date by Group 1 and Purchaser to recognize
each current employee's years of service and level of seniority prior to the
Closing Date with Seller and their affiliates for purposes of terms of
employment and eligibility, vesting, and benefit determination under such plans
and programs (other than benefit accruals under any defined benefit pension
plan).

4. Conditions to Sale.

4.1. Conditions Precedent to Obligations of Purchaser. The
obligation of Purchaser with respect to actions to be taken by Purchaser at or
before the Closing are subject to the satisfaction, or the written waiver by the
Purchaser of each of the following conditions:

4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for a new Sales and Service Agreement for Ford.

4.1.2. Approval for and receipt by Purchaser of all appropriate
licenses and permits for operation of the Dealership at the
Dealership Location, including but not limited to approval by
the Motor Vehicle Division of the Texas Department of
Transportation as the franchise dealer for Ford at the
Dealership Location.

4.1.3. All representations and warranties of Seller as set forth
herein are true and accurate as of the Closing Date and Seller
has performed or is prepared to perform at Closing, all of its
obligations, covenants and agreements hereunder to be performed
prior to or at Closing.

4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.

4.1.5. Receipt of a Phase I environmental survey, and any Phase II
procedures recommended by the survey firm, at Seller's expense,
prepared by a firm approved in writing by Purchaser, showing no
environmental problems or recommended actions, (as determined
by Purchaser in its discretion).

4.1.6. Execution and delivery of a lease agreement in the form
attached hereto as Exhibit "B" for the Dealership Location
("Lease Agreement").

4.1.7. Execution and delivery of an employment agreement by and
between Group 1 and Gregory W. Wessels, and Group 1 and Gene
Messer in the form attached hereto as Exhibit "C1" and Exhibit
"C2" (respectively "Employment Agreements").

4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.1.9. Receipt by Purchaser, at Seller's expense, of a Lessee's Title
Insurance Commitment, issued by the Title Company, approved by
Purchaser, subject only to the Permitted Exceptions, as
described on SCHEDULE 4.1 ("Permitted Title Exceptions").

4.1.10. Receipt by Purchaser, at Seller's expense, of a current ALTA
survey to ACSM urban class standards, of the Property showing
the location of all of the Improvements, prepared by a licensed
surveyor, approved by Purchaser.

4.1.11. The applicable waiting period under the HSR Act with respect to
the transactions contemplated by this Agreement shall have
expired or been terminated.

4.1.12. Purchaser shall have received the opinion of Seller's legal
counsel, dated the Closing Date and satisfactory in form and
substance to Purchaser and its counsel, as to the following
items, with customary qualifications and in reliance upon
documents customarily relied upon in giving such opinions. Such
opinion may be limited to matters governed by the federal laws
of the United States and the laws of the state of Texas.

(a) Due incorporation and existence of Seller and the
corporate power of Seller to execute, deliver and perform
the Asset Purchase Agreement.

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<PAGE> 7

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Bill of Sale and Lease (as to the
Stockholders of Seller and entities controlled by them
which are party to the Lease).

(d) Absence of any violation of the charter or by-laws of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.

4.1.13. Closing of the transactions contemplated in the Related
Agreements.

4.2. Conditions Precedent to Obligations of Seller. The obligation
of Seller with respect to actions to be taken by Seller at or before the Closing
are subject to the satisfaction, or the written waiver by the Seller of each of
the following conditions:

4.2.1. All representations and warranties of Purchaser as set forth
herein are true and accurate as of the Closing Date and
Purchaser has performed all of its obligations, covenants and
agreements hereunder to be performed prior to or at Closing.

4.2.2. Execution and delivery of the Lease Agreement and related lease
guaranty in the form attached hereto as Exhibit "D" ("Lease
Guaranty").

4.2.3. Execution and delivery of the Employment Agreements.

4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.2.5. Seller shall have received the opinion of Purchaser's legal
counsel, as of the Closing Date and satisfactory in form and
substance to Sellers, Stockholders and their counsel, as to the
following items, with customary qualifications and in reliance
upon documents customarily relied upon in giving such opinions.
Such opinion may be limited to matters governed by the federal
laws of the United States and the laws of the states of
Delaware and Texas.

(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Lease, and related Lease Guaranty
agreement.

(d) Absence of any violation of the articles of organization,
operating agreement of Purchaser, or the charter or
by-laws of Purchaser by reason of the execution, delivery
or performance of Asset Purchase Agreement.

(e) Due incorporation and existence of Group 1, and the
shares of Group 1 Common Stock have been duly authorized,
and when issued in accordance with the terms of the Asset
Purchase Agreement, will be fully paid and
non-assessable.

4.2.6. Closing of the transactions contemplated in the Related
Agreements.

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<PAGE> 8

5. Closing.

5.1. Time of Closing. Unless otherwise agreed to in writing by the
parties, Closing shall take place in Lubbock, Texas, on the first Monday
following the receipt of the approvals required in Section 4.1.1, 4.1.2, and
4.1.11., above, and receipt of the approvals required in Section 4.1.1, 4.1.2
and 4.1.11 of each of the Related Agreements ("Closing Date"). Provided however,
that if the Closing has not taken place by September 30, 1999, then Seller or
Purchaser at no further cost or expense as a result of the act of terminating,
may terminate this Agreement at any time by written notice to the other party.

5.2. Seller's Actions at Closing. At Closing, Seller shall deliver
to Purchaser at Seller's sole cost and expense, such bills of sales,
endorsements, assignments, and other good and sufficient instruments of
conveyance and transfer as provided for herein, and any other instruments in
form and substance acceptable to Purchaser as shall be necessary to vest
effective in Purchaser all right, title, and interest in and to the Assets, free
and clear of all liens, charges, encumbrances, pledges or claims of any nature
(except as provided herein), including without limitation, the following:

5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Bill of Sale").

5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.

5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.

5.2.4. A certificate executed by Seller's president in his corporate
and not in his individual capacity, certifying that, as of the
Closing Date, all of the representations and warranties of
Seller are true and correct in all respects and that each and
every covenant and agreement to be performed by Seller prior to
or as of the Closing Date pursuant to this agreement has been
performed in all respects.

5.2.5. A certificate of corporate existence in good standing for
Seller from the State of Texas dated within thirty (30) days of
the Closing Date.

5.2.6. A copy of resolutions duly adopted by Seller authorizing and
approving Seller's performance of the transaction contemplated
herein and the execution and delivery of all documents in
connection with such transactions, certified by the secretary
of Seller, as true in full force as of the Closing Date.

5.2.7. Possession of the Assets.

5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.2.9. Executed Lease Agreement.

5.2.10. Executed Employment Agreements.

5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.

5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.3. Actions of Purchaser at Closing. At the Closing, Purchaser
shall deliver the following:

5.3.1. Payment for the Purchase Price of the Assets less the Earnest
Money, and release any claim to the Earnest Money ("Closing
Payment"), as follows:

(a) The number of shares of Group 1 Common Stock equal to (x) Three
Million One Hundred Twenty Five Thousand and no/100 Dollars
($3,125,000.00), divided by (y) the average closing price of
the Group 1 Common Stock on the New York Stock Exchange for the
Five (5) consecutive trading days ended on the third trading
day prior to the Closing Date. The stock certificates
representing the Group 1

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<PAGE> 9

Common Stock shall be delivered to the Stockholders within
Five (5) business days after the Closing Date. No fractional
shares of Group 1 Common Stock will be issued, but in lieu
thereof, Seller shall receive cash for any fractional shares.

(b) Immediately available funds to Seller in the amount of Purchase
Price less: (i) the Earnest Money, and (ii) Three Million One
Hundred Twenty Five Thousand and no/100 Dollars
($3,125,000.00), shall be delivered (or wired) to Seller on the
Closing Date.

5.3.2. A copy of resolutions duly adopted by Purchaser authorizing and
approving Purchaser's performance of the transactions
contemplated herein and the execution and delivery of all
documents in connection with such transactions, certified by
the secretary of Purchaser, as true in full force as of the
Closing Date.

5.3.3. A certificate executed by Purchaser's Manager certifying that,
as of the Closing Date, all of the representations and
warranties of Purchaser are true and correct in all respects
and that each and every covenant and agreement to be performed
by Purchaser prior to or as of the Closing Date pursuant to
this Agreement has been performed in all respects.

5.3.4. A certificate of existence for Purchaser from the State of
Delaware.

5.3.5. Executed Lease Agreement and Lease Guaranty.

5.3.6. Executed Employment Agreements.

5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.

5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

6. Representations and Warranties. All representations and warranties made
herein by Purchaser and Seller shall be continuing and shall be true and correct
on and as of the Closing Date with the same force and effect as if made at that
time, and shall not be affected by any investigation, verification, or approval
by any party hereto or by anyone acting on behalf of any such party.

6.1. Purchaser. Purchaser represents and warrants to Seller as
follows:

6.1.1. Purchaser is a Delaware limited liability company duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Purchaser has all requisite authority
and power to enter into this Agreement and performs its
obligations herein. The execution and delivery of this
Agreement and the consummation by Purchaser of the transactions
contemplated herein have been authorized by all requisite
company actions on the part of Purchaser.

6.1.2. This Agreement constitutes the valid and binding obligations of
Purchaser enforceable in accordance with its terms. All
documents or agreements being executed and delivered at closing
by Purchasers will constitute valid and binding obligations of
Purchaser enforceable in accordance with its terms.

6.1.3. Neither the execution or delivery of this Agreement by
Purchaser nor the consummation by Purchaser of the transactions
contemplated herein will (i) conflict with or result in a
breach of, the terms, conditions or provisions of, or
constitute a default under the Articles of Organization,
Operating Agreement, resolutions or consents of Purchaser, or
any indenture, mortgage, lease, agreement or other instrument
to which Purchaser is a party; or (ii) violate any law or
regulation to which Purchaser is or will be subject.

6.1.4. Purchaser is not aware of any facts or matters of which Seller
is not aware which would materially and adversely affect
Purchaser's future business operations or the current or future
value of Purchaser's stock or securities.

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<PAGE> 10

6.1.5. Purchaser, to the best of Purchaser's knowledge, warrants that
there are no actions, suits, claims, investigations or other
proceedings pending and there is no action, suit, claim,
investigation, proceeding, grievance, or controversy threatened
against the Purchaser that could affect the ability to
consummate the transaction contemplated in this Agreement.
Furthermore, no governmental agency has at any time challenged
or questioned, or commenced or given notice of intention to
commence any investigation relating to the transactions which
are the subject of this Agreement.

6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.

6.1.7. Purchaser acknowledges and represents and warrants to Seller,
that Purchaser, either directly or through affiliates, has
purchased automobile dealerships, and continues to own and
operate automobile dealerships. As a result, Purchaser is
knowledgeable and familiar with all aspects of purchasing,
owning and operating automobile dealership, and the potential
economic consequences (favorable and unfavorable) that can
occur in the purchase and operation of an automobile
dealership. Purchaser shall conduct its own due diligence and
shall rely solely on its own inspection, examination and
investigation in making the decision to purchase the Assets and
enter in the transaction described in or contemplated ;by this
Agreement, and Purchaser acknowledges that no independent
investigation or verification has been or will be make by any
of the Seller with respect to the accuracy or completeness of
the information supplied by any Seller concerning any of the
Assets and of Seller's business. Except for the warranty of
title contained in the bill of Sale and the representations and
warranties contained in Section 6.2, Seller expressly disclaims
any and all representations, warranties, or guarantees, of any
kind, oral or written, express or implied, including, without
limitation the value, condition, merchantability,
marketability, suitability or fitness for a particular use or
purpose of any of the Assets. Seller is not, and will not make
any representation or warranty express or implied, as to future
profitability of the Dealership or whether Purchaser will be
able to retain any or all of those franchises if they are so
transferred to Purchaser.

6.2. Seller's. Seller represents and warrants to Purchaser as follows:

6.2.1. Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas. Seller is
qualified to do business in Texas, and Seller has all requisite
authority and power to enter into this Agreement. Furthermore,
Seller is duly authorized to own, lease or otherwise hold the
Assets conveyed under this Agreement. The execution, delivery
and performance of this Agreement by Seller and the
consummation by Seller of the transactions contemplated herein
have been authorized by all requisite corporate actions on the
part of the Seller. This Agreement constitutes the valid and
binding obligation of Seller, enforceable in accordance with
its terms.

6.2.2. Neither the execution or delivery of this Agreement by Seller
nor the consummation by Seller of the transactions contemplated
herein will (i) conflict with or result in a breach of, the
terms, conditions or provisions of, or constitute a default
under, or result in the creation of a lien or encumbrance on
any of the property conveyed pursuant to this Agreement,
pursuant to the Articles of Incorporation or Bylaws of Seller,
or any indenture, mortgage, lease, agreement or other
instrument to which Seller is a party or by which any of the
Assets conveyed pursuant to this Agreement may be bound or
affected; or (ii) violate any law or regulation to which Seller
is or will be subject to whereby either them or any of the
Assets conveyed pursuant to this Agreement is bound.

6.2.3. Except for the leased property, Seller has good and marketable
title to all the property conveyed pursuant to this Agreement,
free and clear of all agreements, obligations, liabilities,
security interests, pledges, restrictions, mortgages, liens,
claims or encumbrances of any kind or any conditional sale
agreement or other title retention agreement, except as
specifically set forth on SCHEDULE 6.1.

6.2.4. Seller, to the best of Seller's knowledge, warrants that there
are no actions, suits, claims, investigations or other
proceedings pending and there is no action, suit, claim,
investigation, proceeding, grievance, or controversy threatened
against the Seller that could affect the ability to convey the
Assets conveyed pursuant to this Agreement. Furthermore, no
governmental agency has at any time challenged or questioned,
or commenced or given notice of intention to commence any
investigation relating to the Seller's ownership of the Assets
conveyed pursuant to this Agreement.

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<PAGE> 11

6.2.5. To the best of Seller's knowledge, the Seller is in compliance
in all material respects with all laws, rules, regulations, and
other legal requirements relating to the prevention of
pollution and the protection of the environment (collectively,
"Environmental Laws"). To the best of Seller's knowledge,
including all items included in the Phase I Survey, there is no
other physical condition existing on any property ever owned or
operated by the Company nor are there any physical conditions
existing on any other property that may have been affected by
the Company's operations which could give rise to any material
remedial obligation under any Environmental Laws or which could
result in any material liability to any third party pursuant to
any Environmental Laws.

6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.

6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.

7. Additional Representations and Warranties of Seller and the
Stockholders. Prior to Closing, Seller will cause each Stockholder to execute an
agreement in which each Stockholder, severally and not jointly, represents and
warrants to Purchaser and Group 1 that:

7.1. Investment Intent. The Seller intends to distribute some or all of the
Closing Payment to its stockholders on or shortly after the Closing Date. The
Seller and each Stockholder makes the following representations relating to his,
her or its acquisition of shares of Group 1 Common Stock: (i) such Stockholder
will be acquiring the shares of Group 1 Common Stock to be issued pursuant to
the Acquisition to such Stockholder solely for such Stockholder's account, for
investment purposes only and with no current intention or plan to distribute,
sell or otherwise dispose of any of those shares in connection with any
distribution (except by way of gift to a charitable foundation, provided that
such foundation executes a customary investor representation letter with respect
to exemptions from the Securities Act of 1933 ("Securities Act") and any
applicable state blue sky laws); (ii) such Stockholder is not a party to any
agreement or other arrangement for the disposition of any shares of Group 1
Common Stock; (iii) such Stockholder is an "accredited investor" as defined in
Securities Act Rule 501(a); (iv) such Stockholder (A) is able to bear the
economic risk of an investment in the Group 1 Common Stock acquired pursuant to
this Agreement, (B) can afford to sustain a total loss of that investment, (C)
has such acknowledge and experience in financial and business matters, and such
past participation in investment that he or she is capable of evaluating the
merits and risks of the proposed investment in the Group 1 Common Stock, (D) has
received and reviewed the SEC Documents, (E) has had an adequate opportunity to
ask questions and receive answers from the officers of Group 1 concerning any
and all matters relating to the transactions contemplated hereby, including the
background and experience of the current officers and directors of Group 1, the
plans for operations of the business of Group 1, the business, operations and
financial condition of Group 1 and any plans of Group 1 for additional
acquisitions, and (F) has asked all questions of the nature described in the
preceding clause (E), and all those questions have been answered to his or her
satisfaction; (v) such Stockholder acknowledges that the shares of Group 1
Common Stock to be delivered to such Stockholder pursuant to the Acquisition
have not been and will not be registered under the Securities Act or qualified
under applicable blue sky laws and therefore may not be resold by such
Stockholder without compliance with Rule 144 of the Securities Act; (vi) such
Stockholder, if a corporation, partnership, trust or other entity, acknowledges
that it was not formed for the specific purpose of acquiring the Group 1 Common
Stock; and (viii) without limiting all of the foregoing, such Stockholder agrees
not to dispose of any portion of Group 1 Common Stock unless (1) a registration
statement under the Securities Act is in effect as to the applicable shares and
the disposition is made in accordance with that registration statement, or (2)
the Stockholder has notified Group 1 of the proposed disposition, disposition is
made though Merrill, Lynch, Pierce, Fenner & Smith Incorporated or Goldman,
Sachs & Co., Inc., or any of their successors or affiliates, subject to SEC Rule
144 and such disposition is made in compliance with any other requirements of
the Securities Act. SEC Documents means, Group 1's most recent annual report,
definitive proxy statement filed with the annual report and Form 10-K.

7.2. Restrictions on Transfer of Group 1 Common Stock.

7.2.1. During the one-year period ending on the anniversary of the
Closing Date (the "Restricted Period"), Gregory W. Wessels
("Wessels") will not voluntarily: (i) sell, assign, exchange,
transfer, encumber, pledge, distribute, appoint or otherwise
dispose of (A) any shares of Group 1 Common Stock received by
Wessels in the Acquisition or (B) any interest in (including
any option to buy or sell) any of those shares of Group 1
Common Stock, in whole or in part, and Group 1 will have no
obligation to, and shall not, treat any such attempted transfer
as effective for any purpose or (ii) engage in any transaction,
whether or not with respect to any shares of Group 1 Common
Stock or any interest therein, the intent

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<PAGE> 12

or effect of which is to reduce the risk of owning the shares
of Group 1 Common Stock acquired pursuant to this Agreement
(including, for example, engaging in put, call, short sale,
straddle or similar market transactions). Notwithstanding the
foregoing, Wessels may: (i) pledge shares of Group 1 Common
Stock, provided that the pledgee of such shares shall agree not
to sell or otherwise dispose of any such shares for the
Restricted Period; (ii) transfer shares to immediate family
members or the estate of any such individual (including without
limitation, any transfer by Wessels to or among any trust,
custodial or other similar accounts or funds that are for the
benefit of his or her immediate family members), provided that
such person or entity shall agree not to sell or otherwise
dispose of any such shares for the Restricted Period; and (iii)
transfer shares by will or laws of descent and distribution or
otherwise by reason of such Wessels death. The certificates
evidencing the Group 1 Common Stock delivered to Wessels
pursuant to this Agreement will bear a legend substantially in
the form set forth below and containing such other information
as Group 1 may deem necessary or appropriate:

EXCEPT PURSUANT TO THE TERMS OF THE ASSET PURCHASE AGREEMENT AMONG THE
ISSUER, THE HOLDER OF THIS CERTIFICATE AND THE OTHER PARTIES THERETO,
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE VOLUNTARILY SOLD,
ASSIGNED, EXCHANGED, TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED,
APPOINTED OR OTHERWISE DISPOSED OF, AND THE ISSUER SHALL NOT BE
REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED VOLUNTARY SALE, ASSIGNMENT,
EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE, DISTRIBUTION, APPOINTMENT, OR
OTHER DISPOSITION OF ANY OF THOSE SHARES, DURING THE ONE-YEAR PERIOD
ENDING ON ________________[DATE THAT IS THE ANNIVERSARY OF THE CLOSING
DATE] (THE "RESTRICTED PERIOD"). ON THE WRITTEN REQUEST OF THE HOLDER
OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE THIS RESTRICTIVE
LEGEND (AND ANY STOP ORDER PLACED WITH THE TRANSFER AGENT) AFTER THE
DATE SPECIFIED ABOVE.

7.2.2. Seller and each Stockholder, severally and not jointly with any
other person, (i) acknowledges that the shares of Group 1
Common Stock to be delivered to Seller and that Stockholder
pursuant to this Agreement have not been and, if applicable,
will not be registered under the Securities Act and therefore
may not be resold by Seller or that Stockholder without
compliance with the Securities Act and (ii) covenants that none
of the shares of Group 1 Common Stock issued to Seller or that
Stockholder pursuant to this Agreement will be offered, sold,
assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all the
applicable provisions of the Securities Act and the rules and
regulations of the Commission and applicable state securities
laws and regulations. All certificates evidencing shares of
Group 1 Common Stock issued pursuant to this Agreement will
bear the following legend in addition to the legend prescribed
by Section 7.2.1:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER SUCH ACT, OR SUCH
STATE LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."

In addition, certificates evidencing shares of Group 1 Common Stock
issued pursuant to the Acquisition to Seller and each Stockholder will bear
any legend required by the securities or blue sky laws of the state in
which Seller or that Stockholder resides.

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<PAGE> 13

8. Indemnification.

8.1. Purchaser's Obligation to Indemnify. Purchaser shall indemnify and
hold Seller harmless from and against any and all liability, loss, damage, or
deficiency resulting from: (i) any misrepresentation, breach of warranty, or
nonfulfillment of any agreement on the part of Purchaser under this Agreement;
(ii) any misrepresentations in or occasioned by any certificate, document, or
other instrument furnished or to be furnished by Purchaser herein; (iii)
Purchaser's ownership, management and conduct of the Assets subsequent to
Closing; (iv) any misrepresentation, inaccuracy, or failure of any
representation or warranty of Purchaser; and (v) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs, and expenses,
including without limitation, legal fees and expenses incident to any of the
foregoing or incurred in investigating or attempting to void the same or to
oppose the imposition thereof or in enforcing this indemnity.

8.2. Seller's Obligation to Indemnify. Seller agrees to indemnify, defend
and hold Group 1 and Purchaser harmless (subject to the limitations and
conditions set forth in Sections 8.3 and 8.4) from all Indemnifiable Damages (as
defined below) resulting from: (i) any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller under this Agreement; (ii)
any misrepresentation in or occasioned by any certificate, document, or other
instrument or to be furnished by Seller herein; (iii) except for liabilities
otherwise assumed, the ownership, management, and operations of, and interests
in or to the Assets prior to the Closing of this Agreement; (iv) any
misrepresentation, inaccuracy, or failure of any representation or warranty of
Seller; and (v) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including without limitation, legal
fees and expenses incident to any of the foregoing or incurred in investigating
or attempting to void the same or to oppose the imposition thereof or in
enforcing this indemnity. Each Stockholder will agree to indemnify, defend an
hold Group 1 harmless (subject to the limitations in Section 8.3 and 8.4) from
all Indemnifiable Damages resulting from such Stockholder's breach of Section 7.

8.3. Notice to Indemnifying Party. To be entitled to such indemnification,
the party claiming indemnification ("Indemnified Party") shall give the other
party ("Indemnifying Party") prompt written notice of the assertion by a third
party of any claim with respect to which the Indemnified Party might bring a
claim for indemnification herein, and in all events must have supplied such
notice to the Indemnifying Party within the applicable period for defense of
such claim. This indemnification shall survive the consummation of the
transactions contemplated herein and shall remain in effect for a period of four
(4) years after the Closing Date. The remedies provided under this section shall
be cumulative and shall not preclude any party from asserting any other rights
or seeking any other remedies against any other party hereto. At the option of
the Indemnifying Party, sums due under this section may be offset against any
sums which may be due the Indemnified Party under Any Other Agreement between
them.

8.4. Limitation of Indemnity. Notwithstanding anything to the contrary
contained in this Article 8, the Indemnified Party shall have no claim for
Indemnifiable Damages unless and until all Indemnifiable Damages incurred under
this Section 8.4 of each Related Agreement with each Other Company exceeds Two
Hundred Fifty Thousand and no/100 ($250,000.00) ("Basket Amount"), in which
event the Indemnifying Party shall be liable for only such Indemnifiable Damages
in excess of the Basket Amount; provided, however, that the limitations of (i)
this Section 8.4 shall not apply to (i) any fraud or intentional
misrepresentation, (ii) any intentional breach under this Agreement, (iii) any
misrepresentation or breach under Sections 6.2.1, 6.2.2, 6.2.3 or 3.16 and (iv)
any liabilities of Stockholders or Seller other than Assumed Liabilities.
Additionally, Seller shall not be liable for Indemnifiable Damages in excess of
the Purchase Price, nor shall a Stockholder be liable in excess of the value of
the Group 1 stock received by such Stockholder.

9. Provisions Respecting Employees.

9.1. Dealership Employees. Seller will notify all of its employees who are
engaged at or in connection with the operations of the Dealership (the
"Employees") that the Assets are being sold to Purchaser. Seller shall terminate
all employees effective on the Closing Date and except as otherwise provided in
Section 9.2, Seller assumes the responsibility and obligation for discharging
any and all benefits owed to such terminated employees. Purchaser will receive
applications for employment from such employees and will decide in its sole and
absolute discretion which persons to hire, if any.

9.2. Indemnification for Wages, Severance and Other Obligations. Seller
shall be liable to the Employees for all wages, severance benefits, and other
obligations of any kind whatsoever, including, without limitation, obligations
and liabilities under Seller's Plans (as hereinafter defined), which accrued
through the day before the Closing and shall hold Purchaser harmless from and
indemnify Purchaser against, any and all such liabilities to Employees.
Purchaser agrees to carryover the employees "seniority status" with regard to
vacation days and other compensated leave. Purchaser shall assume the Seller's
obligations for accrued and unused vacation and sick leave on the Closing Date.

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<PAGE> 14

9.3. COBRA Indemnification and Information. Seller shall pay and be liable
to Purchaser and shall assume, indemnify, defend and hold harmless Purchaser
from and against and in respect of any and all losses, damages, liabilities,
taxes, and sanctions that arise under the Consolidated Omnibus Budget
Reconciliation Act of 1984 ("COBRA") and the Code, interest and penalties,
costs, and expenses (including without limitation disbursements and reasonable
legal fees incurred in connection therewith, and in seeking indemnification
therefor, and any amounts or expenses required to be paid or incurred in
connection with any action, suit, proceeding, claim, appeal, demand, assessment,
or judgment) imposed upon, incurred by, or assessed against, Purchaser and any
of its employees arising by reason of or relating to any failure to comply with
the continuation of health care coverage of COBRA and Sections 601 through 608
of ERISA which failure occurred with respect to any current or prior employee of
Seller or any qualified beneficiary of such employee (as defined in COBRA) on or
prior to the date of Closing or as otherwise required as a result of any
transactions or matters contemplated by this agreement.

10. General Provisions.

10.1. Notices. Any notice, demand, or communication required, permitted, or
desired to be given hereunder shall be in writing and shall be deemed
effectively given when personally delivered or mailed by prepaid, certified
mail, return receipt requested, addressed as follows:

<TABLE>
<S> <C>
If to Seller: Gene Messer Ford of Amarillo, Inc.
c/o Gene Messer Ford, Inc.
600 W. 19th Street
Lubbock, Texas 79416
Attn: Greg Wessels

with a copy to: Stephen T. Krier, Esq.
2112 Indiana
Lubbock, Texas 79410-1499

If to Purchaser: Delaware Acquisitions - F, L.L.C.
c/o Robert E. Howard II
P.O. Box 14508
Oklahoma City, Oklahoma, 73113-0508

with a copy to: Randall K. Calvert, Esq.
6520 N. Western, Suite 100
Oklahoma City, Oklahoma 73116
</TABLE>

or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.

10.2. Exhibits. The exhibits attached hereto or included herein are made a
part hereof for all purposes. As used herein, the expression "this Agreement"
means the body of this Agreement and such Exhibits; and the expressions
"herein", "hereof", and "hereunder" and other words of similar import refer to
this Agreement and such Exhibits as a whole and not to any particular part or
subdivision thereof.

10.3. Survival of Obligations. The respective representations, warranties,
covenants, and agreements of the parties to this Agreement shall survive
consummation of the transactions contemplated herein and shall continue in full
force and effect after the Closing without expiration.

10.4. Broker's Fees. Purchaser covenants that it has neither incurred any
obligations for commissions, brokers fees or other related matters. Seller
covenants that it has not incurred any obligations for commissions, brokers fees
or other related matters. It is further agreed that in the event any claims are
made for commissions, brokers fees or other related items, the party incurring
such obligation shall hold the other harmless therefrom.

10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.

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<PAGE> 15

10.6. Attorney's Fees. If this Agreement or any term or provision hereof
becomes the subject of litigation, the prevailing party in such litigation will
be entitled to recover from the non-prevailing party court costs and reasonable
attorney's fees.

10.7. Entire Agreement. This Agreement and the other agreements of even
date herewith (herein "Any Other Agreement") and the agreements attached as
exhibits hereto, contains the entire understanding of the parties with respect
to the sale of the assets of Seller to Purchaser and supersedes all prior
agreements, arrangements and understandings, whether written or oral, relating
to the subject matter hereof and all of them are merged into this Agreement.

10.8. Severability. Any provision of this agreement which is prohibited or
unenforceable, in whole or in part, in any jurisdiction shall be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof.

10.9. Amendment. This Agreement may not be amended by any oral agreement or
understanding but only by an amendment in writing executed by the parties
hereto.

10.10. Binding Effect. The terms, conditions and covenants of this
Agreement shall apply to, inure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns. This
Agreement or a portion thereof may be assigned by either party upon receipt of
the written consent of the non-assigning party.

10.11. Further Instruments. Seller shall make, execute and deliver in due
form, such other and further instruments as Purchaser may deem necessary to
carry out and further the purposes of this Agreement.

10.12. Specific Performance. The parties hereto recognize that the
Purchaser's remedies at law for damages in the event of breach of this Agreement
are inadequate and accordingly, it is the intention of the parties that the
obligations and duties of the parties hereunder shall be enforceable in equity
by specific performance, and further the Purchaser's remedy is specifically
limited to specific performance.

10.13. Headings. The section headings contained in this Agreement are for
convenience only and shall not affect in any way the meaning or interpretation
of the Agreement.

10.14. Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts which, taken together, shall constitute collectively one
(1) agreement; but in making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart.

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.

"PURCHASER"
Delaware Acquisitions - F, L.L.C.,
a Delaware limited liability company

By: /s/ ROBERT E. HOWARD II
---------------------------------------------------
Robert E. Howard II, Manager

"SELLER"
Gene Messer Ford of Amarillo, Inc.
a Texas corporation

By: /s/ GENE MESSER
---------------------------------------------------
Gene Messer, President

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<PAGE> 16

ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED

<TABLE>
<S> <C>
Class I Cash and Cash Equivalents $

Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $

Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $

Class IV All Section 197 intangibles, except those in the
nature of goodwill $

Class V Goodwill $

Total of Classes, I, II, III, IV, and V $
</TABLE>

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

1. Date of Sale: , 1999.
----------
2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:

Yes No
---------- ---------
3. Were any of the following purchased or entered into:

License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?

Yes No
---------- ---------
If "yes," specify (a) type of agreement and (b) maximum amount of
consideration (not including interest) paid or to be paid under agreement.
Attach separate sheet detailing the above.

Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.

<TABLE>
<S> <C>
PURCHASER: SELLER:
Delaware Acquisitions - F, L.L.C. Gene Messer Ford of Amarillo, Inc.
Taxpayer ID No. Taxpayer ID No. 75-2231187
--------------------

BY: BY:
---------------------------------- -------------------------------------
</TABLE>

<PAGE> 17

ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT

<PAGE> 18

ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - WESSELS

<PAGE> 19

ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - MESSER

<PAGE> 20

ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY

<PAGE> 21

ASSET PURCHASE AGREEMENT
EXHIBIT "E"
BILL OF SALE

<PAGE> 22

ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST

<PAGE> 23

ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST

<PAGE> 24

ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES

<PAGE> 25

ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS

<PAGE> 26

ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES

<PAGE> 27

ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS

<PAGE> 1
EXHIBIT 10.3

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Gene Messer Cadillac, Inc., a Texas corporation d/b/a/ Gene Messer Jeep
("Seller"), and Delaware Acquisitions - CC, L.L.C., a Delaware limited liability
company and Delaware Acquisitions - GM, L.L.C., a Delaware limited liability
company ("Purchaser").

EXPLANATORY STATEMENT

WHEREAS, Seller is presently a party to a Sales and Service Agreement with
Cadillac Motor Division of General Motors Corporation ("Cadillac") and Chrysler
Corporation ("Jeep") (collectively or individually "Manufacturer"); which
provide for the sale and service of Cadillac and Jeep vehicles ("Dealership") at
2501 Paramount, Amarillo, Texas 79109 (the "Dealership Location"); and

WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Cadillac and Jeep
dealer at the Dealership Location.

WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;

WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;

WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;

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<PAGE> 2

WHEREAS, Manufacturers desire that Cadillac and Jeep be operated from
separate entities and Purchasers have agreed to purchase the Assets (as
hereinafter defined) jointly and to divide the Cadillac and Jeep Assets between
them at Closing (as hereinafter defined);

2. Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller agrees to sell and deliver to Purchaser, and Purchaser agrees
to purchase and take from Seller certain assets, property rights, tangible and
intangible, of the Dealership more specifically described below ("Assets"), all
of which are presently being used in the operation of the Dealership, for the
purpose of succeeding the Seller as the authorized Cadillac and Jeep dealer at
the Dealership Location. At the Closing (as hereinafter defined) Delaware
Acquisitions - CC, L.L.C. shall acquire the Assets utilized in the Jeep
Dealership and Delaware Acquisitions - GM, L.L.C. shall acquire the Assets
utilized in the Cadillac Dealership.

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<PAGE> 3

2.1.2, below. Purchaser shall pay factory invoice, less:
holdback, floor plan assistance or interest credits, model year
change-over allowances, full fuel tank reimbursement, or other
manufacturer allowances or incentives paid or payable to
Seller. Vehicles in inventory which previously have been
delivered to a customer together with the Manufacturer's
Certificate of Origin ("MCO") (e.g. "unwinds" or "back-outs")
shall be considered used cars and sold pursuant to the terms of
section 2.1.2, below. Seller will furnish proper documentation
(including an "R.D.R. card", "sale card," or comparable
documentation) to Purchaser so that Purchaser may subsequently
sell, transfer and register such vehicles as new vehicles.
Seller shall disclose all damage as well as any repairs made to
any vehicle. Any vehicle previously damaged, even if repaired,
if the cost of repairing such damage exceeds or has exceeded
Five Hundred Dollars ($500), shall be considered used cars and
sold pursuant to the terms of section 2.1.2, below. Installed
accessories shall be purchased at actual dealer cost, except
Purchaser shall not pay for rust-proofing, undercoating,
scotch-guarding, non-Manufacturer alarm systems, interrupt
systems, theft prevention devices and similar dealer additions.
A list of new vehicles together with the information to
calculate the Purchase Price, will be provided to Purchaser at
least Five (5) days prior to the Closing Date.

2.1.2. Purchaser will purchase all of the used vehicle inventory of
Seller, which are less than Seventy Five (75) days old, at the
book value of the vehicles, as reflected on Seller's books,
less the "Pack" added to the book value of the vehicles by
Seller. Purchaser will purchase all of the used vehicle
inventory of Seller, which is more than Seventy Five (75) days
old, at the current wholesale market value of the vehicles as
determined by the Purchaser, provided that Seller may retain
any of said used vehicles if Seller is not satisfied with the
valuation established. Seller shall deliver titles to all used
vehicles within One Hundred Twenty (120) days after the Closing
Date. Seller guarantees the delivery of the used car titles to
Purchaser. If Seller is unable to deliver the title to a
vehicle within One Hundred Twenty (120) days after the Closing
Date, Seller will repurchase the vehicle.

2.1.3. Purchaser agrees to purchase Seller's actual verifiable
inventory of new, unused, undamaged and non-obsolete
Manufacturer's parts and accessories. Purchase Price will be
those dealer prices in accordance with the Manufacturer's Price
Schedules in effect on the Closing Date. Seller shall assign to
Purchaser the termination rights provided by each
Manufacturer's Sales and Service Agreement, to the extent same
exist or are assignable. In the alternative, Seller agrees to
allow Purchaser to exercise any and all Seller's termination
rights in Seller's name.

2.1.4. Purchaser agrees to purchase Seller's actual verifiable
inventory of after-market parts and accessories. The Purchase
Price will be the dealer's actual cost.

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<PAGE> 4
2.1.6. Purchaser shall purchase all oil and grease in Seller's
possession at Seller's cost.

2.1.7. Purchaser shall purchase from Seller all of the fixed assets
including all machinery and shop equipment, special tools,
parts and accessories equipment, furniture and fixtures, and
company vehicles. Purchaser shall purchase the fixed assets of
Seller listed in SCHEDULE 2.1 ("Fixed Asset List") attached
hereto, for Fifty Six Thousand Two Hundred Sixty Two and no/100
Dollars ($56,262.00). The Fixed Asset List shall be deemed to
include all fixed assets located at the Dealership Location,
even if omitted from SCHEDULE 2.1, unless said asset is
specifically listed on SCHEDULE 2.2 ("Retained Assets")
attached hereto, in which case the asset shall be retained by
Seller. Seller agrees to provide Purchaser with SCHEDULES 2.1
and SCHEDULE 2.2 for attachment hereto, on or before March 15,
1999.

2.1.8. Seller will transfer to Purchaser all parts catalogues, service
manuals, films, videos, instructional materials, vehicle
literature, supplies and other assets used in the sales or
service of Cadillac and Jeep vehicles and used vehicles ("Other
Assets") (specifically excluding Retained Assets") whether or
not such assets are considered fixed assets or are reported as
such on Seller's books and records or listed on the attached
SCHEDULE 2.1. Purchaser shall purchase the Other Assets of
Seller for Five Thousand and no/100 Dollars ($5,000.00).

2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations
for the computer, telephone, copier, and manufacturer required
leased equipment. In addition Purchaser will assume other
leases not otherwise described above with a total monthly
obligation not to exceed One Thousand and no/100 Dollars
($1,000.00) per month, in the aggregate. A copy of the lease
agreements and contract listed on SCHEDULE 2.4, together with
any amendments thereto, shall be delivered to Purchaser as soon
as practical after execution of this Agreement. Seller agrees
to provide Purchaser with SCHEDULE 2.4 for attachment hereto,
on or before March 15, 1999.

2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's
telephone numbers. Purchaser shall receive all sales and
service files and parts records, customer lists, computer files
containing sales and service files, parts records and customer
lists and all other information and documents which are
necessary and/or which might be useful in the furtherance of
the dealership business (Seller shall retain its employee
personnel files, general ledgers, sub-ledgers, canceled checks,
journals, vouchers, tax returns and other accounting ledgers.).
Purchaser agrees to pay Seller for the goodwill, the sum of Two
Million One Hundred Fifty Three Thousand Five Hundred Eighty
Seven and No/100 Dollars ($2,153,587.00).

2.2. Liens and Encumbrances. All Assets will be transferred free of any
liens or encumbrances, except for the obligations which Purchaser agrees to
assume, as listed on the attached Schedule 2.3 ("Assumed Liabilities").

-4-
<PAGE> 5
3. Supplemental Agreements.

3.1. Maintenance of Business Prior to Closing. Seller agrees that prior to
Closing it shall operate its business in a manner consistent with prior business
practice. In connection therewith, the parties agree that Seller may dealer
trade vehicles for similar models, but Seller shall not liquidate or otherwise
dispose of any of its new vehicles other than in the ordinary course of business
to retail buyers. Seller agrees to maintain its advertising expenditures and
activities commensurate with prior business practices. Seller shall not
advertise a "Going Out of Business" sale. Seller agrees to pay (or contest, if
disputed) Seller's trade payables, including Seller's telephone and yellow pages
bills, through the Closing Date. All revenue and expenses prior to Closing shall
be the benefit and burden of Seller.

3.2. Seller's Name. Seller shall assign all rights to the name "Gene Messer
Cadillac and Jeep" to Purchaser. Purchaser may not assign this Agreement or any
right hereunder to any unrelated third party. Seller values its name and
reputation in the community, has investigated Group 1 and its management and
believes that Group 1 and Purchaser will preserve and carry forward the name and
reputation that Seller, and its primary owner, Gene Messer, whose name is used
in the business, has established in its community for many years. Purchaser and
Group 1 agree that it will not assign this Agreement or any rights hereunder to
any unrelated third party, and in the event that substantially all of the assets
of the Dealership or the equity ownership of the Dealership are acquired by any
party other than Group 1 or an entity controlled by Group 1, the name "Messer"
shall immediately cease to be used in the promotion and name of the dealership
so acquired by the third party. In the event there is an adverse change in the
operations to the extent that the integrity of the name Gene Messer is impacted,
Seller shall have the opportunity to request the Board of Directors of Group 1
("Board"), that the name "Messer" be removed from the dealership within a
reasonable period of time. After due consideration of the facts and
circumstances of this request, the decision of the Board will be final.

3.3. Prepaids. Seller shall retain all prepaid accounts, provided however,
that Seller and Purchaser may review the prepaid accounts and transfer any such
prepaid accounts as they determine mutually beneficial, at the amount agreed to
by them.

3.4. Liabilities. Purchaser is not assuming the floor plan liabilities of
Seller. As of the Closing Date, Seller and Purchaser shall obtain the complete
release and discharge of the floor plan liability secured by liens on vehicles
or other assets conveyed under this Agreement. Purchaser is not assuming any
other liabilities of Seller, except as otherwise provided herein.

3.5. Retail Orders. On the Closing Date, Seller shall turn over or assign
by proper and appropriate instruments to Purchaser all unfulfilled retail orders
and customer deposits attributable thereto, held by Seller as of the Closing
Date. Purchaser shall assume such retail orders and responsibility to the
customer for making future delivery of any vehicle covered by the orders.

-5-
<PAGE> 6

the attached EXHIBIT "A" ("Allocation of Purchase Price"). The parties hereto
agree that each of them will timely file with the Internal Revenue Service Form
8594 and that all tax returns or other tax information any party hereto files or
cause to be filed with any governmental agency including the Internal Revenue
Service, will be prepared in a manner that is consistent with this section.

3.7. Property Taxes. All real and personal property taxes on property
owned or leased by Seller, which are not covered by the VIT (as hereinafter
defined), for the current year shall be prorated to the Closing Date. If the
amount of property taxes for the current tax year has not been fixed by the
Closing Date, the proration of such taxes shall be based upon the preceding tax
year's assessment. Purchaser shall receive the prorated taxes and shall pay the
full tax amount when due. Purchaser shall collect and remit the "vehicle
inventory tax" under Section 23.122 of the Texas Property Tax Code ("VIT") on
each vehicle sold by Purchaser after the Closing Date through December 31, 1999.
All such remittances shall be applied to the 1999 VIT liability of the
Dealership. If the aggregate of all remittances is not sufficient to fully
discharge Dealership's liability, Seller shall be liable for the balance of tax
owing.

3.8. Information Releases. Purchaser and the Seller will jointly prepare
and issue all releases of information relating to the sale. Subject to the prior
sentence, if inquiries are made by any person with respect to any transaction
contemplated by this Agreement, Seller and Purchaser will consult each other
prior to responding to such inquiries.

3.9. Business Records. Seller shall not copy or remove any of the records
described in Section 2.10 from the dealership premises prior to the Closing Date
and shall return any of such records previously removed. Seller agrees that such
information is extremely important to Purchaser and promises to retain such
information in strict confidence and will not disclose any such information to
Purchaser's competitors or other parties. Purchaser agrees that Purchaser will
retain such information for a period not less than seven (7) years after the
Closing Date and that Seller and Seller's representatives may have access to
review and copy such information during Purchaser's regular business hours if
such information is necessary for Seller's business purposes. Purchaser and its
representatives may have access to review and copy any records retained by
Seller during Seller's regular business hours if such information is necessary
in Purchaser's operation of the dealership business after Closing. Seller agrees
to remove all retained records from the Dealership Location with thirty (30)
days after the Closing Date. If Purchaser wishes to destroy any of the business
records transferred by Seller, within Seven (7) years of the Closing Date,
Purchaser shall notify Seller prior to such destruction, in order that Seller
may retain such records.

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<PAGE> 7

3.16. Expenses. Regardless of whether the transaction contemplated herein
is consummated, all costs and expenses in connection with this Agreement and the
transactions

-7-
<PAGE> 8

contemplated hereby incurred by Purchaser shall be paid by Purchaser and all
such costs and expenses incurred by Sellers and Stockholders shall be paid by
the Sellers; provided, however, that Group 1 shall pay for all costs associated
with (i) preparation of the HSR Act filing and the HSR filing fees; and (ii)
application and approval process with the Manufacturer.

3.17. Right of First Refusal. If within Ten (10) years of the Closing Date,
Purchaser agrees to transfer the Sales and Service Agreement for Cadillac and
Jeep ("Franchise") to an independent third party (an entity not owned or
controlled by Group 1), in a transaction that is not part of the Manufacturer's
channelling or alignment programs (e.g. "Project 2000"), any such agreement
shall be subject to the terms and provisions of this Section 3.17 and Seller
shall have the right of first refusal upon such assets transferred. If Purchaser
enters into an agreement to transfer the Franchise ("Transfer Agreement") in a
transaction which is subject to this right of first refusal, then Purchaser
shall deliver a copy of the Transfer Agreement together with the financial and
operating information provided to the prospective transferee, to Seller
("Notice"). Seller will have thirty (30) days from the Notice date to exercise
Seller's right to assume the prospective transferee's position under the
Transfer Agreement. If Seller exercises the right of first refusal, Seller must
comply with all terms, conditions and covenants of the Transfer Agreement. If
Seller does not respond to the Notice within thirty (30) days it will be deemed
refused by Seller. If Seller does not exercise the right of first refusal, then
Purchaser may complete the transaction contemplated in the Transfer Agreement,
upon the terms and conditions contained therein. If Purchaser does not close the
transaction contemplated in the Transfer Agreement within One Hundred Eighty
(180) days, then Seller's right of first refusal on such assets shall be
reinstated.

4. Conditions to Sale.

4.1. Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser with respect to actions to be taken by Purchaser at or before the
Closing are subject to the satisfaction, or the written waiver by the Purchaser
of each of the following conditions:

4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for a new Sales and Service Agreements for Cadillac and Jeep.

-8-
<PAGE> 9

4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.

4.1.6. Execution and delivery of an assignment of the lease agreement
of the Dealership Location ("Assignment of Lease").

4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.1.11. The applicable waiting period under the HSR Act with respect to
the transactions contemplated by this Agreement shall have
expired or been terminated.

(a) Due incorporation and existence of Seller and the
corporate power of Seller to execute, deliver and perform
the Asset Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Bill of Sale and Assignment of Lease.

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<PAGE> 10

(d) Absence of any violation of the charter or by-laws of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.

4.1.13. Closing of the transactions contemplated in the Related
Agreements.

4.2. Conditions Precedent to Obligations of Seller. The obligation of
Seller with respect to actions to be taken by Seller at or before the Closing
are subject to the satisfaction, or the written waiver by the Seller of each of
the following conditions:

4.2.2. Execution and delivery of the Assignment of Lease.

4.2.3. Execution and delivery of the Employment Agreements.

4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement.

-10-
<PAGE> 11

4.2.6. Closing of the transactions contemplated in the Related
Agreements.

5. Closing.

5.1. Time of Closing. Unless otherwise agreed to in writing by the parties,
Closing shall take place in Lubbock, Texas, on the first Monday following the
receipt of the approvals required in Section 4.1.1, 4.1.2, and 4.1.11., above,
and receipt of the approvals required in Section 4.1.1, 4.1.2 and 4.1.11 of each
of the Related Agreements ("Closing Date"). Provided however, that if the
Closing has not taken place by September 30, 1999, then Seller or Purchaser at
no further cost or expense as a result of the act of terminating, may terminate
this Agreement at any time by written notice to the other party.

5.2. Seller's Actions at Closing. At Closing, Seller shall deliver to
Purchaser at Seller's sole cost and expense, such bills of sales, endorsements,
assignments, and other good and sufficient instruments of conveyance and
transfer as provided for herein, and any other instruments in form and substance
acceptable to Purchaser as shall be necessary to vest effective in Purchaser all
right, title, and interest in and to the Assets, free and clear of all liens,
charges, encumbrances, pledges or claims of any nature (except as provided
herein), including without limitation, the following:

5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Bill of Sale").

5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.

5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.

5.2.5. A certificate of corporate existence in good standing for
Seller from the State of Texas dated within thirty (30) days of
the Closing Date.

5.2.7. Possession of the Assets.

-11-
<PAGE> 12

5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.2.9. Executed Assignment of Lease.

5.2.10. Executed Employment Agreements.

5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.

5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.3. Actions of Purchaser at Closing. At the Closing, Purchaser shall
deliver the following:

5.3.1. Payment for the Purchase Price of the Assets less the Earnest
Money, and release any claim to the Earnest Money ("Closing
Payment"), as follows:

(a) The number of shares of Group 1 Common Stock equal to (x) Six
Hundred Twenty Five Thousand and no/100 Dollars ($625,000.00),
divided by (y) the average closing price of the Group 1 Common
Stock on the New York Stock Exchange for the Five (5)
consecutive trading days ended on the third trading day prior
to the Closing Date. The stock certificates representing the
Group 1 Common Stock shall be delivered to the Stockholders
within Five (5) business days after the Closing Date. No
fractional shares of Group 1 Common Stock will be issued, but
in lieu thereof, Seller shall receive cash for any fractional
shares.

(b) Immediately available funds to Seller in the amount of Purchase
Price less: (i) the Earnest Money, and (ii) Six Hundred Twenty
Five Thousand and no/100 Dollars ($625,000.00) shall be
delivered (or wired) to Seller on the Closing Date.

5.3.4. A certificate of existence for Purchaser from the State of
Delaware.

5.3.5. Executed Assignment of Lease.

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<PAGE> 13

5.3.6. Executed Employment Agreements.

5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.

5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

6. Representations and Warranties. All representations and warranties
made herein by Purchaser and Seller shall be continuing and shall be true and
correct on and as of the Closing Date with the same force and effect as if made
at that time, and shall not be affected by any investigation, verification, or
approval by any party hereto or by anyone acting on behalf of any such party.

6.1. Purchaser. Purchaser represents and warrants to Seller as follows:

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<PAGE> 14

6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.

6.2. Seller's. Seller represents and warrants to Purchaser as follows:

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<PAGE> 15

pursuant to this Agreement may be bound or affected; or (ii)
violate any law or regulation to which Seller is or will be
subject to whereby either them or any of the Assets conveyed
pursuant to this Agreement is bound.

6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.

6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.

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<PAGE> 16

account, for investment purposes only and with no current intention or plan to
distribute, sell or otherwise dispose of any of those shares in connection with
any distribution (except by way of gift to a charitable foundation, provided
that such foundation executes a customary investor representation letter with
respect to exemptions from the Securities Act of 1933 ("Securities Act") and any
applicable state blue sky laws); (ii) such Stockholder is not a party to any
agreement or other arrangement for the disposition of any shares of Group 1
Common Stock; (iii) such Stockholder is an "accredited investor" as defined in
Securities Act Rule 501(a); (iv) such Stockholder (A) is able to bear the
economic risk of an investment in the Group 1 Common Stock acquired pursuant to
this Agreement, (B) can afford to sustain a total loss of that investment, (C)
has such acknowledge and experience in financial and business matters, and such
past participation in investment that he or she is capable of evaluating the
merits and risks of the proposed investment in the Group 1 Common Stock, (D) has
received and reviewed the SEC Documents, (E) has had an adequate opportunity to
ask questions and receive answers from the officers of Group 1 concerning any
and all matters relating to the transactions contemplated hereby, including the
background and experience of the current officers and directors of Group 1, the
plans for operations of the business of Group 1, the business, operations and
financial condition of Group 1 and any plans of Group 1 for additional
acquisitions, and (F) has asked all questions of the nature described in the
preceding clause (E), and all those questions have been answered to his or her
satisfaction; (v) such Stockholder acknowledges that the shares of Group 1
Common Stock to be delivered to such Stockholder pursuant to the Acquisition
have not been and will not be registered under the Securities Act or qualified
under applicable blue sky laws and therefore may not be resold by such
Stockholder without compliance with Rule 144 of the Securities Act; (vi) such
Stockholder, if a corporation, partnership, trust or other entity, acknowledges
that it was not formed for the specific purpose of acquiring the Group 1 Common
Stock; and (viii) without limiting all of the foregoing, such Stockholder agrees
not to dispose of any portion of Group 1 Common Stock unless (1) a registration
statement under the Securities Act is in effect as to the applicable shares and
the disposition is made in accordance with that registration statement, or (2)
the Stockholder has notified Group 1 of the proposed disposition, disposition is
made though Merrill, Lynch, Pierce, Fenner & Smith Incorporated or Goldman,
Sachs & Co., Inc., or any of their successors or affiliates, subject to SEC Rule
144 and such disposition is made in compliance with any other requirements of
the Securities Act. SEC Documents means, Group 1's most recent annual report,
definitive proxy statement filed with the annual report and Form 10-K.

7.2. Restrictions on Transfer of Group 1 Common Stock.

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<PAGE> 17

to this Agreement (including, for example, engaging in put,
call, short sale, straddle or similar market transactions).
Notwithstanding the foregoing, Wessels may: (i) pledge shares
of Group 1 Common Stock, provided that the pledgee of such
shares shall agree not to sell or otherwise dispose of any such
shares for the Restricted Period; (ii) transfer shares to
immediate family members or the estate of any such individual
(including without limitation, any transfer by Wessels to or
among any trust, custodial or other similar accounts or funds
that are for the benefit of his or her immediate family
members), provided that such person or entity shall agree not
to sell or otherwise dispose of any such shares for the
Restricted Period; and (iii) transfer shares by will or laws of
descent and distribution or otherwise by reason of such Wessels
death. The certificates evidencing the Group 1 Common Stock
delivered to Wessels pursuant to this Agreement will bear a
legend substantially in the form set forth below and containing
such other information as Group 1 may deem necessary or
appropriate:

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<PAGE> 18

8. Indemnification.

-18-
<PAGE> 19

9. Provisions Respecting Employees.

-19-
<PAGE> 20

10. General Provisions.

<TABLE>
<S> <C>
If to Seller: Gene Messer Cadillac, Inc.
c/o Gene Messer Ford, Inc.
600 W. 19th Street
Lubbock, Texas 79416
Attn: Greg Wessels

with a copy to: Stephen T. Krier, Esq.
2112 Indiana
Lubbock, Texas 79410-1499

If to Purchaser: Delaware Acquisitions - CC, L.L.C.
c/o Robert E. Howard II
P.O. Box 14508
Oklahoma City, Oklahoma, 73113-0508

with a copy to: Randall K. Calvert, Esq.
6520 N. Western, Suite 100
Oklahoma City, Oklahoma 73116
</TABLE>

or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.

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<PAGE> 21

10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.

10.9. Amendment. This Agreement may not be amended by any oral agreement
or understanding but only by an amendment in writing executed by the parties
hereto.

10.13. Headings. The section headings contained in this Agreement are for
convenience only and shall not affect in any way the meaning or interpretation
of the Agreement.

[The remainder of this page is intentionally blank.]

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<PAGE> 22

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.

"PURCHASER"
Delaware Acquisitions - CC, L.L.C., a
Delaware limited liability company
Delaware Acquisitions - GM, L.L.C., a
Delaware limited liability company

By: /s/ ROBERT E. HOWARD II
-----------------------------------------------------
Robert E. Howard II, Manager

"SELLER"
Gene Messer Cadillac, Inc.,
a Texas corporation

By: /s/ GENE MESSER
-----------------------------------------------------
Gene Messer, President

<PAGE> 23

ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED
-----------------------------------------

<TABLE>
<S> <C>
Class I Cash and Cash Equivalents $

Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $

Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $

Class IV All Section 197 intangibles, except those in the
nature of goodwill $

Class V Goodwill $

Total of Classes, I, II, III, IV, and V $
</TABLE>

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

1. Date of Sale: __________, 1999.

2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:

__________ Yes _________ No

3. Were any of the following purchased or entered into:

License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?

__________ Yes _________ No

If "yes," specify (a) type of agreement and (b) maximum amount of
consideration (not including interest) paid or to be paid under agreement.
Attach separate sheet detailing the above.

Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.

PURCHASER: SELLER:

Taxpayer ID No. ____________________ Taxpayer ID No. ___________________

BY:_______________________________ BY:_______________________________

<PAGE> 24

ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT

<PAGE> 25

ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - WESSELS

<PAGE> 26

ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - MESSER

<PAGE> 27

ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY

<PAGE> 28

ASSET PURCHASE AGREEMENT
EXHIBIT "E"
BILL OF SALE

<PAGE> 29

ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST

<PAGE> 30

ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST

<PAGE> 31

ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES

<PAGE> 32

ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS

<PAGE> 33

ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES

<PAGE> 34

ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS

<PAGE> 1
EXHIBIT 10.4

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Gene Messer Ford, Inc., a Texas corporation ("Seller"), and Delaware
Acquisitions - F, L.L.C., a Delaware limited liability company ("Purchaser").

EXPLANATORY STATEMENT

WHEREAS, Seller is presently a party to a Sales and Service Agreement
with Ford Motor Company ("Ford") ("Manufacturer"); which provide for the sale
and service of Ford vehicles ("Dealership") at 6000 W. 19th Street, Lubbock,
Texas (the "Dealership Location"); and

WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Ford dealer at the
Dealership Location.

WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;

WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;

WHEREAS, the Companies are dependent on each other for management
skills, training, "best practices," and economies of scale, and the Seller could
not operate its business effectively without the benefits it receives from the
other Companies;

WHEREAS, while the parties have allocated the value of the goodwill
among the Companies based upon an objective formula, the effect of each Company
on the combined goodwill of all of the Companies as a group is significantly
greater than the goodwill allocated to each Company separately;

WHEREAS, the Seller would not sell the Assets to Purchaser unless
Purchaser continues the existing relationships among the Companies and Purchaser
and affiliates buy substantially all of the assets of the Companies;

WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;

WHEREAS, it is the expectation of both Seller and Purchaser and a
material term of this Agreement that substantially all of the assets of all of
the Companies will be controlled by one entity and their names, local
management, employees and goodwill be preserved;

WHEREAS, Seller is presently a party to a franchise agreement with NAPA
which provides for the sale of NAPA parts, accessories, paint and automotive
products in Lubbock, Texas;

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<PAGE> 2

2.1.Purchase Price. The purchase price for the Assets to be sold and
transferred by Seller to Purchaser shall be the total of the items listed in
Sections 2.1.1. through 2.1.11. (collectively, the "Purchase Price"):

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<PAGE> 3

may subsequently sell, transfer and register such vehicles as
new vehicles. Seller shall disclose all damage as well as any
repairs made to any vehicle. Any vehicle previously damaged,
even if repaired, if the cost of repairing such damage exceeds
or has exceeded Five Hundred Dollars ($500), shall be
considered used cars and sold pursuant to the terms of section
2.1.2, below. Installed accessories shall be purchased at
actual dealer cost, except Purchaser shall not pay for
rust-proofing, undercoating, scotch-guarding, non-Manufacturer
alarm systems, interrupt systems, theft prevention devices and
similar dealer additions. A list of new vehicles together with
the information to calculate the Purchase Price, will be
provided to Purchaser at least Five (5) days prior to the
Closing Date.

2.1.4. Purchaser agrees to purchase Seller's actual verifiable
inventory of after-market parts and accessories. The Purchase
Price will be the dealer's actual cost.

2.1.6. Purchaser shall purchase all oil and grease in Seller's
possession at Seller's cost.

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<PAGE> 4

located at the Dealership Location, even if omitted from
SCHEDULE 2.1, unless said asset is specifically listed on
SCHEDULE 2.2 ("Retained Assets") attached hereto, in which
case the asset shall be retained by Seller. Seller agrees to
provide Purchaser with SCHEDULES 2.1 and SCHEDULE 2.2 for
attachment hereto, on or before March 15, 1999.

2.1.8. Seller will transfer to Purchaser all parts catalogues,
service manuals, films, videos, instructional materials,
vehicle literature, supplies and other assets used in the
sales or service of Ford vehicles and used vehicles, and
Hillcrest Country Club stock ("Other Assets") (specifically
excluding Retained Assets") whether or not such assets are
considered fixed assets or are reported as such on Seller's
books and records or listed on the attached SCHEDULE 2.1.
Purchaser shall purchase the Other Assets of Seller for Five
Thousand and no/100 Dollars ($5,000.00).

2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations
for the computer, telephone, copier, and manufacturer required
leased equipment. In addition Purchaser will assume other
leases not otherwise described above with a total monthly
obligation not to exceed One Thousand and no/100 Dollars
($1,000.00) per month, in the aggregate. A copy of the lease
agreements and contract listed on SCHEDULE 2.4, together with
any amendments thereto, shall be delivered to Purchaser as
soon as practical after execution of this Agreement. Seller
agrees to provide Purchaser with SCHEDULE 2.4 for attachment
hereto, on or before March 15, 1999.

2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's
telephone numbers. Purchaser shall receive all sales and
service files and parts records, customer lists, computer
files containing sales and service files, parts records and
customer lists and all other information and documents which
are necessary and/or which might be useful in the furtherance
of the dealership business (Seller shall retain its employee
personnel files, general ledgers, sub-ledgers, canceled
checks, journals, vouchers, tax returns and other accounting
ledgers.). Purchaser agrees to pay Seller for the goodwill,
the sum of Sixteen Million Six Hundred Eighty Thousand Five
Hundred Six and No/100 Dollars ($16,680,506.00).

2.1.11. Purchaser agrees to purchase Seller's actual verifiable
inventory of NAPA parts, accessories, paint and automotive
products. The Purchase Price will be the Seller's actual cost.

2.2. Liens and Encumbrances. All Assets will be transferred free of any
liens or encumbrances, except for the obligations which Purchaser agrees to
assume, as listed on the attached Schedule 2.3 ("Assumed Liabilities").

-4-
<PAGE> 5

3. Supplemental Agreements.

3.1. Maintenance of Business Prior to Closing. Seller agrees that prior
to Closing it shall operate its business in a manner consistent with prior
business practice. In connection therewith, the parties agree that Seller may
dealer trade vehicles for similar models, but Seller shall not liquidate or
otherwise dispose of any of its new vehicles other than in the ordinary course
of business to retail buyers. Seller agrees to maintain its advertising
expenditures and activities commensurate with prior business practices. Seller
shall not advertise a "Going Out of Business" sale. Seller agrees to pay (or
contest, if disputed) Seller's trade payables, including Seller's telephone and
yellow pages bills, through the Closing Date. All revenue and expenses prior to
Closing shall be the benefit and burden of Seller.

3.2. Seller's Name. Seller shall assign all rights to the name "Gene
Messer Ford" to Purchaser. Purchaser may not assign this Agreement or any right
hereunder to any unrelated third party. Seller values its name and reputation in
the community, has investigated Group 1 and its management and believes that
Group 1 and Purchaser will preserve and carry forward the name and reputation
that Seller, and its primary owner, Gene Messer, whose name is used in the
business, has established in its community for many years. Purchaser and Group 1
agree that it will not assign this Agreement or any rights hereunder to any
unrelated third party, and in the event that substantially all of the assets of
the Dealership or the equity ownership of the Dealership are acquired by any
party other than Group 1 or an entity controlled by Group 1, the name "Messer"
shall immediately cease to be used in the promotion and name of the dealership
so acquired by the third party. In the event there is an adverse change in the
operations to the extent that the integrity of the name Gene Messer is impacted,
Seller shall have the opportunity to request the Board of Directors of Group 1
("Board"), that the name "Messer" be removed from the dealership within a
reasonable period of time. After due consideration of the facts and
circumstances of this request, the decision of the Board will be final.

3.4. Liabilities. Purchaser is not assuming the floor plan liabilities
of Seller. As of the Closing Date, Seller and Purchaser shall obtain the
complete release and discharge of the floor plan liability secured by liens on
vehicles or other assets conveyed under this Agreement. Purchaser is not
assuming any other liabilities of Seller, except as otherwise provided herein.

-5-
<PAGE> 6

3.7. Property Taxes. All real and personal property taxes on property
owned or leased by Seller, which are not covered by the VIT (as hereinafter
defined), for the current year shall be prorated to the Closing Date. If the
amount of property taxes for the current tax year has not been fixed by the
Closing Date, the proration of such taxes shall be based upon the preceding tax
year's assessment. Purchaser shall receive the prorated taxes and shall pay the
full tax amount when due. Purchaser shall collect and remit the "vehicle
inventory tax" under Section 23.122 of the Texas Property Tax Code ("VIT") on
each vehicle sold by Purchaser after the Closing Date through December 31, 1999.
All such remittances shall be applied to the 1999 VIT liability of the
Dealership. If the aggregate of all remittances is not sufficient to fully
discharge Dealership's liability, Seller shall be liable for the balance of tax
owing.

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<PAGE> 7

3.11. Confidentiality. Group 1, Purchaser, Seller and Stockholders
agree, and they agree to cause their officers, directors, employees,
representatives and consultants, to hold in confidence and not to disclose to
others for any reason whatsoever, any and all non-public information received by
it or its representatives in connection with this transaction, including but not
limited to all terms, conditions and agreements related to this transaction,
except (i) as required by law; and (ii) for disclosure to officers, directors,
employees, attorneys, accountants and other representatives of Seller as
necessary in connection with the transactions contemplated hereby or as
necessary to the operation of Seller's business. In the event the transactions
contemplated by this Agreement are not consummated, Seller will return all
non-public documents and other material obtained from Purchaser or its
representatives in connection with the transactions contemplated hereby or
certify to Purchaser that all such information has been destroyed. Neither party
will make a public statement without the other parties consent.

3.14. Finance Reserves. Purchaser shall receive all finance reserves,
if any, and shall assume responsibility for all chargebacks of unearned finance
income, vehicle service contracts and credit life insurance, other than
chargebacks from default or early payoff prior to the customer making three (3)
regular installment payments under the agreement.

3.15. Stock Options. An integral consideration for this Agreement and
the Related Agreements is the post-closing acceptance of non-dealer ownership of
the employer by select employees of Seller. To aid in this employee acceptance
of the change in ownership of employer, Group 1 agrees to make available to
selected employees options to acquire Group 1 common stock on the same basis as
employees of its other dealerships. The numbers of such options will be
consistent with the numbers of options awarded to other similarly sized Group 1
owned dealerships. Nothing herein shall be construed to mean that any employee
is entitled to, or will receive, any stock options.

3.16. Expenses. Regardless of whether the transaction contemplated
herein is consummated, all costs and expenses in connection with this Agreement
and the transactions

-7-
<PAGE> 8

3.17. Right of First Refusal. If within Ten (10) years of the Closing
Date, Purchaser agrees to transfer the Sales and Service Agreement for Ford
("Franchise") to an independent third party (an entity not owned or controlled
by Group 1), in a transaction that is not part of the Manufacturer's channelling
or alignment programs (e.g. "Project 2000"), any such agreement shall be subject
to the terms and provisions of this Section 3.17 and Seller shall have the right
of first refusal upon such assets transferred. If Purchaser enters into an
agreement to transfer the Franchise ("Transfer Agreement") in a transaction
which is subject to this right of first refusal, then Purchaser shall deliver a
copy of the Transfer Agreement together with the financial and operating
information provided to the prospective transferee, to Seller ("Notice"). Seller
will have thirty (30) days from the Notice date to exercise Seller's right to
assume the prospective transferee's position under the Transfer Agreement. If
Seller exercises the right of first refusal, Seller must comply with all terms,
conditions and covenants of the Transfer Agreement. If Seller does not respond
to the Notice within thirty (30) days it will be deemed refused by Seller. If
Seller does not exercise the right of first refusal, then Purchaser may complete
the transaction contemplated in the Transfer Agreement, upon the terms and
conditions contained therein. If Purchaser does not close the transaction
contemplated in the Transfer Agreement within One Hundred Eighty (180) days,
then Seller's right of first refusal on such assets shall be reinstated.

4. Conditions to Sale.

4.1. Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser with respect to actions to be taken by Purchaser at or before the
Closing are subject to the satisfaction, or the written waiver by the Purchaser
of each of the following conditions:

4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for a new Sales and Service Agreement for Ford.

4.1.3. All representations and warranties of Seller as set forth
herein are true and accurate as of the Closing Date and Seller
has performed or is prepared to perform at

-8-
<PAGE> 9

Closing, all of its obligations, covenants and agreements
hereunder to be performed prior to or at Closing.

4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.

4.1.5. Receipt of a Phase I environmental survey, and any Phase II
procedures recommended by the survey firm, at Seller's
expense, prepared by a firm approved in writing by Purchaser,
showing no environmental problems or recommended actions, (as
determined by Purchaser in its discretion).

4.1.6. Execution and delivery of a lease agreement in the form
attached hereto as Exhibit "B" for the Dealership Location
("Lease Agreement").

4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.1.11. The applicable waiting period under the HSR Act with respect
to the transactions contemplated by this Agreement shall have
expired or been terminated.

4.1.12. Purchaser shall have received the opinion of Seller's legal
counsel, dated the Closing Date and satisfactory in form and
substance to Purchaser and its counsel, as to the following
items, with customary qualifications and in reliance upon
documents customarily relied upon in giving such opinions.
Such opinion may be limited to matters governed by the federal
laws of the United States and the laws of the state of Texas.

(a) Due incorporation and existence of Seller and the
corporate power of Seller to execute, deliver and
perform the Asset Purchase Agreement.

(b) Due authorization, execution and delivery of the
Asset Purchase Agreement, Bill of Sale and Lease (as
to the Stockholders of Seller and entities controlled
by them which are party to the Lease).

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<PAGE> 10

(d) Absence of any violation of the charter or by-laws of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.

4.1.13. Closing of the transactions contemplated in the Related
Agreements.

4.1.14. Approval of Purchaser, for a new NAPA franchise.

4.2. Conditions Precedent to Obligations of Seller. The obligation of
Seller with respect to actions to be taken by Seller at or before the Closing
are subject to the satisfaction, or the written waiver by the Seller of each of
the following conditions:

4.2.2. Execution and delivery of the Lease Agreement and related
lease guaranty in the form attached hereto as Exhibit "D"
("Lease Guaranty").

4.2.3. Execution and delivery of the Employment Agreements.

4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.2.5. Seller shall have received the opinion of Purchaser's legal
counsel, as of the Closing Date and satisfactory in form and
substance to Sellers, Stockholders and their counsel, as to
the following items, with customary qualifications and in
reliance upon documents customarily relied upon in giving such
opinions. Such opinion may be limited to matters governed by
the federal laws of the United States and the laws of the
states of Delaware and Texas.

(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.

(b) Due authorization, execution and delivery of the
Asset Purchase Agreement, Lease, and related Lease
Guaranty agreement.

(d) Absence of any violation of the articles of
organization, operating agreement of Purchaser, or
the charter or by-laws of Purchaser by reason of the
execution, delivery or performance of Asset Purchase
Agreement.

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<PAGE> 11

(e) Due incorporation and existence of Group 1, and the
shares of Group 1 Common Stock have been duly
authorized, and when issued in accordance with the
terms of the Asset Purchase Agreement, will be fully
paid and non-assessable.

4.2.6. Closing of the transactions contemplated in the Related
Agreements.

5. Closing.

5.2. Seller's Actions at Closing. At Closing, Seller shall deliver to
Purchaser at Seller's sole cost and expense, such bills of sales, endorsements,
assignments, and other good and sufficient instruments of conveyance and
transfer as provided for herein, and any other instruments in form and substance
acceptable to Purchaser as shall be necessary to vest effective in Purchaser all
right, title, and interest in and to the Assets, free and clear of all liens,
charges, encumbrances, pledges or claims of any nature (except as provided
herein), including without limitation, the following:

5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Bill of Sale").

5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.

5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.

5.2.4. A certificate executed by Seller's president in his corporate
and not in his individual capacity, certifying that, as of the
Closing Date, all of the representations and warranties of
Seller are true and correct in all respects and that each and
every covenant and agreement to be performed by Seller prior
to or as of the Closing Date pursuant to this agreement has
been performed in all respects.

5.2.5. A certificate of corporate existence in good standing for
Seller from the State of Texas dated within thirty (30) days
of the Closing Date.

5.2.6. A copy of resolutions duly adopted by Seller authorizing and
approving Seller's performance of the transaction contemplated
herein and the execution and delivery

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<PAGE> 12

of all documents in connection with such transactions,
certified by the secretary of Seller, as true in full force as
of the Closing Date.

5.2.7. Possession of the Assets.

5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.2.9. Executed Lease Agreement.

5.2.10. Executed Employment Agreements.

5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.

5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.3. Actions of Purchaser at Closing. At the Closing, Purchaser shall
deliver the following:

5.3.1. Payment for the Purchase Price of the Assets less the Earnest
Money, and release any claim to the Earnest Money ("Closing
Payment"), as follows:

(a) The number of shares of Group 1 Common Stock equal to
(x) Five Million and no/100 Dollars ($5,000,000.00),
divided by (y) the average closing price of the Group
1 Common Stock on the New York Stock Exchange for the
Five (5) consecutive trading days ended on the third
trading day prior to the Closing Date. The stock
certificates representing the Group 1 Common Stock
shall be delivered to the Stockholders within Five
(5) business days after the Closing Date. No
fractional shares of Group 1 Common Stock will be
issued, but in lieu thereof, Seller shall receive
cash for any fractional shares.

(b) Immediately available funds to Seller in the amount
of Purchase Price less: (i) the Earnest Money, and
(ii) Five Million and no/100 Dollars ($5,000,000.00),
shall be delivered (or wired) to Seller on the
Closing Date.

5.3.2. A copy of resolutions duly adopted by Purchaser authorizing
and approving Purchaser's performance of the transactions
contemplated herein and the execution and delivery of all
documents in connection with such transactions, certified by
the secretary of Purchaser, as true in full force as of the
Closing Date.

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<PAGE> 13

5.3.4. A certificate of existence for Purchaser from the State of
Delaware.

5.3.5. Executed Lease Agreement and Lease Guaranty.

5.3.6. Executed Employment Agreements.

5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.

5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

6. Representations and Warranties. All representations and warranties
made herein by Purchaser and Seller shall be continuing and shall be true and
correct on and as of the Closing Date with the same force and effect as if made
at that time, and shall not be affected by any investigation, verification, or
approval by any party hereto or by anyone acting on behalf of any such party.

6.1. Purchaser. Purchaser represents and warrants to Seller as follows:

6.1.1. Purchaser is a Delaware limited liability company duly
organized, validly existing and in good standing under the
laws of the State of Delaware. Purchaser has all requisite
authority and power to enter into this Agreement and performs
its obligations herein. The execution and delivery of this
Agreement and the consummation by Purchaser of the
transactions contemplated herein have been authorized by all
requisite company actions on the part of Purchaser.

6.1.2. This Agreement constitutes the valid and binding obligations
of Purchaser enforceable in accordance with its terms. All
documents or agreements being executed and delivered at
closing by Purchasers will constitute valid and binding
obligations of Purchaser enforceable in accordance with its
terms.

6.1.3. Neither the execution or delivery of this Agreement by
Purchaser nor the consummation by Purchaser of the
transactions contemplated herein will (i) conflict with or
result in a breach of, the terms, conditions or provisions of,
or constitute a default under the Articles of Organization,
Operating Agreement, resolutions or consents of Purchaser, or
any indenture, mortgage, lease, agreement or other instrument
to which Purchaser is a party; or (ii) violate any law or
regulation to which Purchaser is or will be subject.

6.1.5. Purchaser, to the best of Purchaser's knowledge, warrants that
there are no actions, suits, claims, investigations or other
proceedings pending and there is no action,

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<PAGE> 14

suit, claim, investigation, proceeding, grievance, or
controversy threatened against the Purchaser that could affect
the ability to consummate the transaction contemplated in this
Agreement. Furthermore, no governmental agency has at any time
challenged or questioned, or commenced or given notice of
intention to commence any investigation relating to the
transactions which are the subject of this Agreement.

6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.

6.1.7. Purchaser acknowledges and represents and warrants to Seller,
that Purchaser, either directly or through affiliates, has
purchased automobile dealerships, and continues to own and
operate automobile dealerships. As a result, Purchaser is
knowledgeable and familiar with all aspects of purchasing,
owning and operating automobile dealership, and the potential
economic consequences (favorable and unfavorable) that can
occur in the purchase and operation of an automobile
dealership. Purchaser shall conduct its own due diligence and
shall rely solely on its own inspection, examination and
investigation in making the decision to purchase the Assets
and enter in the transaction described in or contemplated ;by
this Agreement, and Purchaser acknowledges that no independent
investigation or verification has been or will be make by any
of the Seller with respect to the accuracy or completeness of
the information supplied by any Seller concerning any of the
Assets and of Seller's business. Except for the warranty of
title contained in the bill of Sale and the representations
and warranties contained in Section 6.2, Seller expressly
disclaims any and all representations, warranties, or
guarantees, of any kind, oral or written, express or implied,
including, without limitation the value, condition,
merchantability, marketability, suitability or fitness for a
particular use or purpose of any of the Assets. Seller is not,
and will not make any representation or warranty express or
implied, as to future profitability of the Dealership or
whether Purchaser will be able to retain any or all of those
franchises if they are so transferred to Purchaser.

6.2. Seller's. Seller represents and warrants to Purchaser as follows:

6.2.1. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas. Seller
is qualified to do business in Texas, and Seller has all
requisite authority and power to enter into this Agreement.
Furthermore, Seller is duly authorized to own, lease or
otherwise hold the Assets conveyed under this Agreement. The
execution, delivery and performance of this Agreement by
Seller and the consummation by Seller of the transactions
contemplated herein have been authorized by all requisite
corporate actions on the part of the Seller. This Agreement
constitutes the valid and binding obligation of Seller,
enforceable in accordance with its terms.

6.2.2. Neither the execution or delivery of this Agreement by Seller
nor the consummation by Seller of the transactions
contemplated herein will (i) conflict

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<PAGE> 15

with or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, or result in the
creation of a lien or encumbrance on any of the property
conveyed pursuant to this Agreement, pursuant to the Articles
of Incorporation or Bylaws of Seller, or any indenture,
mortgage, lease, agreement or other instrument to which Seller
is a party or by which any of the Assets conveyed pursuant to
this Agreement may be bound or affected; or (ii) violate any
law or regulation to which Seller is or will be subject to
whereby either them or any of the Assets conveyed pursuant to
this Agreement is bound.

6.2.4. Seller, to the best of Seller's knowledge, warrants that there
are no actions, suits, claims, investigations or other
proceedings pending and there is no action, suit, claim,
investigation, proceeding, grievance, or controversy
threatened against the Seller that could affect the ability to
convey the Assets conveyed pursuant to this Agreement.
Furthermore, no governmental agency has at any time challenged
or questioned, or commenced or given notice of intention to
commence any investigation relating to the Seller's ownership
of the Assets conveyed pursuant to this Agreement.

6.2.5. To the best of Seller's knowledge, the Seller is in compliance
in all material respects with all laws, rules, regulations,
and other legal requirements relating to the prevention of
pollution and the protection of the environment (collectively,
"Environmental Laws"). To the best of Seller's knowledge,
including all items included in the Phase I Survey, there is
no other physical condition existing on any property ever
owned or operated by the Company nor are there any physical
conditions existing on any other property that may have been
affected by the Company's operations which could give rise to
any material remedial obligation under any Environmental Laws
or which could result in any material liability to any third
party pursuant to any Environmental Laws.

6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.

6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.

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<PAGE> 16

7.1. Investment Intent. The Seller intends to distribute some or
all of the Closing Payment to its stockholders on or shortly after the Closing
Date. The Seller and each Stockholder makes the following representations
relating to his, her or its acquisition of shares of Group 1 Common Stock: (i)
such Stockholder will be acquiring the shares of Group 1 Common Stock to be
issued pursuant to the Acquisition to such Stockholder solely for such
Stockholder's account, for investment purposes only and with no current
intention or plan to distribute, sell or otherwise dispose of any of those
shares in connection with any distribution (except by way of gift to a
charitable foundation, provided that such foundation executes a customary
investor representation letter with respect to exemptions from the Securities
Act of 1933 ("Securities Act") and any applicable state blue sky laws); (ii)
such Stockholder is not a party to any agreement or other arrangement for the
disposition of any shares of Group 1 Common Stock; (iii) such Stockholder is an
"accredited investor" as defined in Securities Act Rule 501(a); (iv) such
Stockholder (A) is able to bear the economic risk of an investment in the Group
1 Common Stock acquired pursuant to this Agreement, (B) can afford to sustain a
total loss of that investment, (C) has such acknowledge and experience in
financial and business matters, and such past participation in investment that
he or she is capable of evaluating the merits and risks of the proposed
investment in the Group 1 Common Stock, (D) has received and reviewed the SEC
Documents, (E) has had an adequate opportunity to ask questions and receive
answers from the officers of Group 1 concerning any and all matters relating to
the transactions contemplated hereby, including the background and experience of
the current officers and directors of Group 1, the plans for operations of the
business of Group 1, the business, operations and financial condition of Group 1
and any plans of Group 1 for additional acquisitions, and (F) has asked all
questions of the nature described in the preceding clause (E), and all those
questions have been answered to his or her satisfaction; (v) such Stockholder
acknowledges that the shares of Group 1 Common Stock to be delivered to such
Stockholder pursuant to the Acquisition have not been and will not be registered
under the Securities Act or qualified under applicable blue sky laws and
therefore may not be resold by such Stockholder without compliance with Rule 144
of the Securities Act; (vi) such Stockholder, if a corporation, partnership,
trust or other entity, acknowledges that it was not formed for the specific
purpose of acquiring the Group 1 Common Stock; and (viii) without limiting all
of the foregoing, such Stockholder agrees not to dispose of any portion of Group
1 Common Stock unless (1) a registration statement under the Securities Act is
in effect as to the applicable shares and the disposition is made in accordance
with that registration statement, or (2) the Stockholder has notified Group 1 of
the proposed disposition, disposition is made though Merrill, Lynch, Pierce,
Fenner & Smith Incorporated or Goldman, Sachs & Co., Inc., or any of their
successors or affiliates, subject to SEC Rule 144 and such disposition is made
in compliance with any other requirements of the Securities Act. SEC Documents
means, Group 1's most recent annual report, definitive proxy statement filed
with the annual report and Form 10-K.

7.2. Restrictions on Transfer of Group 1 Common Stock.

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<PAGE> 17

shares of Group 1 Common Stock, in whole or in part, and Group
1 will have no obligation to, and shall not, treat any such
attempted transfer as effective for any purpose or (ii) engage
in any transaction, whether or not with respect to any shares
of Group 1 Common Stock or any interest therein, the intent or
effect of which is to reduce the risk of owning the shares of
Group 1 Common Stock acquired pursuant to this Agreement
(including, for example, engaging in put, call, short sale,
straddle or similar market transactions). Notwithstanding the
foregoing, Wessels may: (i) pledge shares of Group 1 Common
Stock, provided that the pledgee of such shares shall agree
not to sell or otherwise dispose of any such shares for the
Restricted Period; (ii) transfer shares to immediate family
members or the estate of any such individual (including
without limitation, any transfer by Wessels to or among any
trust, custodial or other similar accounts or funds that are
for the benefit of his or her immediate family members),
provided that such person or entity shall agree not to sell or
otherwise dispose of any such shares for the Restricted
Period; and (iii) transfer shares by will or laws of descent
and distribution or otherwise by reason of such Wessels death.
The certificates evidencing the Group 1 Common Stock delivered
to Wessels pursuant to this Agreement will bear a legend
substantially in the form set forth below and containing such
other information as Group 1 may deem necessary or
appropriate:

EXCEPT PURSUANT TO THE TERMS OF THE ASSET PURCHASE AGREEMENT
AMONG THE ISSUER, THE HOLDER OF THIS CERTIFICATE AND THE OTHER
PARTIES THERETO, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE VOLUNTARILY SOLD, ASSIGNED, EXCHANGED, TRANSFERRED,
ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED
OF, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY
ATTEMPTED VOLUNTARY SALE, ASSIGNMENT, EXCHANGE, TRANSFER,
ENCUMBRANCE, PLEDGE, DISTRIBUTION, APPOINTMENT, OR OTHER
DISPOSITION OF ANY OF THOSE SHARES, DURING THE ONE-YEAR PERIOD
ENDING ON ________________[DATE THAT IS THE ANNIVERSARY OF THE
CLOSING DATE] (THE "RESTRICTED PERIOD"). ON THE WRITTEN REQUEST
OF THE HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE
THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH THE
TRANSFER AGENT) AFTER THE DATE SPECIFIED ABOVE.

7.2.2. Seller and each Stockholder, severally and not jointly with
any other person, (i) acknowledges that the shares of Group 1
Common Stock to be delivered to Seller and that Stockholder
pursuant to this Agreement have not been and, if applicable,
will not be registered under the Securities Act and therefore
may not be resold by Seller or that Stockholder without
compliance with the Securities Act and (ii) covenants that
none of the shares of Group 1 Common Stock issued to Seller or
that Stockholder pursuant to this Agreement will be offered,
sold, assigned, pledged, hypothecated, transferred or
otherwise disposed of except after full compliance with all
the applicable provisions of the Securities Act and the rules
and regulations of the Commission and applicable state
securities laws and regulations. All certificates evidencing
shares of Group 1 Common Stock issued pursuant to this
Agreement will bear the following legend in addition to the
legend prescribed by Section 7.2.1:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR

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<PAGE> 18

INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER
SUCH ACT, OR SUCH STATE LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED."

In addition, certificates evidencing shares of Group 1 Common
Stock issued pursuant to the Acquisition to Seller and each
Stockholder will bear any legend required by the securities or blue
sky laws of the state in which Seller or that Stockholder resides.

8. Indemnification.

8.2. Seller's Obligation to Indemnify. Seller agrees to indemnify,
defend and hold Group 1 and Purchaser harmless (subject to the limitations and
conditions set forth in Sections 8.3 and 8.4) from all Indemnifiable Damages (as
defined below) resulting from: (i) any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller under this Agreement; (ii)
any misrepresentation in or occasioned by any certificate, document, or other
instrument or to be furnished by Seller herein; (iii) except for liabilities
otherwise assumed, the ownership, management, and operations of, and interests
in or to the Assets prior to the Closing of this Agreement; (iv) any
misrepresentation, inaccuracy, or failure of any representation or warranty of
Seller; and (v) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including without limitation, legal
fees and expenses incident to any of the foregoing or incurred in investigating
or attempting to void the same or to oppose the imposition thereof or in
enforcing this indemnity. Each Stockholder will agree to indemnify, defend an
hold Group 1 harmless (subject to the limitations in Section 8.3 and 8.4) from
all Indemnifiable Damages resulting from such Stockholder's breach of Section 7.

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<PAGE> 19

herein and shall remain in effect for a period of four (4) years after the
Closing Date. The remedies provided under this section shall be cumulative and
shall not preclude any party from asserting any other rights or seeking any
other remedies against any other party hereto. At the option of the Indemnifying
Party, sums due under this section may be offset against any sums which may be
due the Indemnified Party under Any Other Agreement between them.

9. Provisions Respecting Employees.

9.1. Dealership Employees. Seller will notify all of its employees who
are engaged at or in connection with the operations of the Dealership (the
"Employees") that the Assets are being sold to Purchaser. Seller shall terminate
all employees effective on the Closing Date and except as otherwise provided in
Section 9.2, Seller assumes the responsibility and obligation for discharging
any and all benefits owed to such terminated employees. Purchaser will receive
applications for employment from such employees and will decide in its sole and
absolute discretion which persons to hire, if any.

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<PAGE> 20

against, Purchaser and any of its employees arising by reason of or relating to
any failure to comply with the continuation of health care coverage of COBRA and
Sections 601 through 608 of ERISA which failure occurred with respect to any
current or prior employee of Seller or any qualified beneficiary of such
employee (as defined in COBRA) on or prior to the date of Closing or as
otherwise required as a result of any transactions or matters contemplated by
this agreement.

10. General Provisions.

10.1. Notices. Any notice, demand, or communication required,
permitted, or desired to be given hereunder shall be in writing and shall be
deemed effectively given when personally delivered or mailed by prepaid,
certified mail, return receipt requested, addressed as follows:

If to Seller: Gene Messer Ford, Inc.
c/o Gene Messer Ford, Inc.
600 W. 19th Street
Lubbock, Texas 79416
Attn: Greg Wessels

with a copy to: Stephen T. Krier, Esq.
2112 Indiana
Lubbock, Texas 79410-1499

If to Purchaser: Delaware Acquisitions - F, L.L.C.
c/o Robert E. Howard II
P.O. Box 14508
Oklahoma City, Oklahoma, 73113-0508

with a copy to: Randall K. Calvert, Esq.
6520 N. Western, Suite 100
Oklahoma City, Oklahoma 73116

or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.

10.2. Exhibits. The exhibits attached hereto or included herein are
made a part hereof for all purposes. As used herein, the expression "this
Agreement" means the body of this Agreement and such Exhibits; and the
expressions "herein", "hereof", and "hereunder" and other words of similar
import refer to this Agreement and such Exhibits as a whole and not to any
particular part or subdivision thereof.

10.3. Survival of Obligations. The respective representations,
warranties, covenants, and agreements of the parties to this Agreement shall
survive consummation of the transactions contemplated herein and shall continue
in full force and effect after the Closing without expiration.

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<PAGE> 21

10.4. Broker's Fees. Purchaser covenants that it has neither incurred
any obligations for commissions, brokers fees or other related matters. Seller
covenants that it has not incurred any obligations for commissions, brokers fees
or other related matters. It is further agreed that in the event any claims are
made for commissions, brokers fees or other related items, the party incurring
such obligation shall hold the other harmless therefrom.

10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.

10.6. Attorney's Fees. If this Agreement or any term or provision
hereof becomes the subject of litigation, the prevailing party in such
litigation will be entitled to recover from the non-prevailing party court costs
and reasonable attorney's fees.

10.8. Severability. Any provision of this agreement which is prohibited
or unenforceable, in whole or in part, in any jurisdiction shall be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof.

10.9. Amendment. This Agreement may not be amended by any oral
agreement or understanding but only by an amendment in writing executed by the
parties hereto.

10.11. Further Instruments. Seller shall make, execute and deliver in
due form, such other and further instruments as Purchaser may deem necessary to
carry out and further the purposes of this Agreement.

10.13. Headings. The section headings contained in this Agreement are
for convenience only and shall not affect in any way the meaning or
interpretation of the Agreement.

10.14. Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts which, taken together, shall constitute
collectively one (1) agreement; but in making

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<PAGE> 22

proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart.

[The remainder of this page is intentionally blank.]

<PAGE> 23

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.

"PURCHASER"
Delaware Acquisitions - F, L.L.C.,
a Delaware limited liability company

By: /s/ ROBERT E. HOWARD II
----------------------------------------
Robert E. Howard II, Manager

"SELLER"
Gene Messer Ford, Inc., a Texas corporation

By: /s/ GENE MESSER
----------------------------------------
Gene Messer, President

<PAGE> 24

ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED

Class I Cash and Cash Equivalents $

Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $

Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $

Class IV All Section 197 intangibles, except those in the
nature of goodwill $

Class V Goodwill $

Total of Classes, I, II, III, IV, and V $

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

1. Date of Sale: __________, 1999.

2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:

[ ] Yes [ ] No

3. Were any of the following purchased or entered into:

License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?

[ ] Yes [ ] No

If "yes," specify (a) type of agreement and (b) maximum amount of
consideration (not including interest) paid or to be paid under agreement.
Attach separate sheet detailing the above.

Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.

PURCHASER: SELLER:
Delaware Acquisitions-F, L.L.C. Gene Messer Ford, Inc.
Taxpayer ID No. ____________________ Taxpayer ID No. 75-1531445

BY: ________________________________ BY: ______________________________

<PAGE> 25

ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT

<PAGE> 26

ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - WESSELS

<PAGE> 27

ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - MESSER

<PAGE> 28

ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY

<PAGE> 29

ASSET PURCHASE AGREEMENT
EXHIBIT "E"
BILL OF SALE

<PAGE> 30

ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST

<PAGE> 31

ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST

<PAGE> 32

ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES

<PAGE> 33

ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS

<PAGE> 34

ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES

<PAGE> 35

ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS

<PAGE> 1
EXHIBIT 10.5

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Messer, Wessels and Messer, Inc., a Texas corporation d/b/a/ Gene Messer
Toyota ("Seller"), and Delaware Acquisitions - T, L.L.C., a Delaware limited
liability company ("Purchaser").

EXPLANATORY STATEMENT

WHEREAS, Seller is presently a party to a Sales and Service Agreement with
Gulf States Toyota, Inc. ("Toyota") ("Manufacturer"); which provide for the sale
and service of Toyota vehicles ("Dealership") at 7007 University Avenue,
Lubbock, Texas 79423 (the "Dealership Location"); and

WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Toyota dealer at
the Dealership Location.

WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;

WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;

WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;

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Related Agreement, all of which are conditioned on the purchase by Purchaser or
affiliates of substantially all of the assets of the Companies, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

2.1.1. Purchaser agrees to purchase all new, unused and undamaged
current model year motor vehicles with less than Six Thousand
(6,000) miles in Seller's inventory at the Closing Date (as
hereinafter defined). Vehicles with more than Six Thousand
(6,000) miles shall be considered used and sold pursuant to the
terms of Section 2.1.2, below. Purchaser shall pay factory
invoice, less: holdback, floor plan assistance or interest
credits, model year change-over allowances, full fuel tank
reimbursement, or other manufacturer allowances or incentives
paid or payable to Seller. Vehicles in inventory which
previously have been delivered to a customer together with the
Manufacturer's Certificate of Origin ("MCO") (e.g. "unwinds" or
"back-outs") shall be considered used cars and sold pursuant to
the terms of section 2.1.2, below. Seller will furnish proper
documentation (including an "R.D.R. card", "sale card," or
comparable documentation) to Purchaser so that Purchaser may
subsequently sell, transfer and register such vehicles as new
vehicles. Seller shall disclose all damage as well as any
repairs made to any vehicle. Any vehicle previously damaged,
even if repaired, if the cost of repairing such damage exceeds
or has exceeded Five Hundred Dollars ($500), shall be
considered used cars and sold pursuant to the terms of section
2.1.2, below. Installed accessories shall be

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<PAGE> 3

purchased at actual dealer cost, except Purchaser shall not pay
for rust-proofing, undercoating, scotch-guarding,
non-Manufacturer alarm systems, interrupt systems, theft
prevention devices and similar dealer additions. A list of new
vehicles together with the information to calculate the
Purchase Price, will be provided to Purchaser at least Five (5)
days prior to the Closing Date.

2.1.2. Purchaser will purchase all of the used vehicle inventory of
Seller, which are less than Seventy Five (75) days old, at the
book value of the vehicles, as reflected on Seller's books,
less the "Pack" added to the book value of the vehicles by
Seller. Purchaser will purchase all of the used vehicle
inventory of Seller, which is more than Seventy Five (75) days
old, at the current wholesale market value of the vehicles as
determined by the Purchaser, provided that Seller may retain
any of said used vehicles if Seller is not satisfied with the
valuation established. Seller shall deliver titles to all used
vehicles within One Hundred Twenty (120) days after the Closing
Date. Seller guarantees the delivery of the used car titles to
Purchaser. If Seller is unable to deliver the title to a
vehicle within One Hundred Twenty (120) days after the Closing
Date, Seller will repurchase the vehicle.

2.1.3. Purchaser agrees to purchase Seller's actual verifiable
inventory of new, unused, undamaged and non-obsolete
Manufacturer's parts and accessories. Purchase Price will be
those dealer prices in accordance with the Manufacturer's Price
Schedules in effect on the Closing Date. Seller shall assign to
Purchaser the termination rights provided by each
Manufacturer's Sales and Service Agreement, to the extent same
exist or are assignable. In the alternative, Seller agrees to
allow Purchaser to exercise any and all Seller's termination
rights in Seller's name.

2.1.4. Purchaser agrees to purchase Seller's actual verifiable
inventory of after-market parts and accessories. The Purchase
Price will be the dealer's actual cost.

2.1.6. Purchaser shall purchase all oil and grease in Seller's
possession at Seller's cost.

2.1.7. Purchaser shall purchase from Seller all of the fixed assets
including all machinery and shop equipment, special tools,
parts and accessories equipment, furniture and fixtures, and
company vehicles. Purchaser shall purchase the fixed assets of
Seller listed in SCHEDULE 2.1 ("Fixed Asset List") attached
hereto, for Thirty Eight Thousand Four Hundred Ninety and
no/100 Dollars ($38,490.00). The Fixed Asset List shall be
deemed to include all fixed assets located at the Dealership
Location, even if omitted from SCHEDULE 2.1, unless said asset
is specifically listed on SCHEDULE 2.2 ("Retained Assets")
attached hereto, in which case the asset shall be retained by
Seller. Seller agrees to provide Purchaser with SCHEDULES 2.1
and SCHEDULE 2.2 for attachment hereto, on or before March 15,
1999.

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2.1.8. Seller will transfer to Purchaser all parts catalogues, service
manuals, films, videos, instructional materials, vehicle
literature, supplies and other assets used in the sales or
service of Toyota vehicles and used vehicles ("Other Assets")
(specifically excluding Retained Assets") whether or not such
assets are considered fixed assets or are reported as such on
Seller's books and records or listed on the attached SCHEDULE
2.1. Purchaser shall purchase the Other Assets of Seller for
Five Thousand and no/100 Dollars ($5,000.00).

2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations
for the computer, telephone, copier, and manufacturer required
leased equipment. In addition Purchaser will assume other
leases not otherwise described above with a total monthly
obligation not to exceed One Thousand and no/100 Dollars
($1,000.00) per month, in the aggregate. A copy of the lease
agreements and contract listed on SCHEDULE 2.4, together with
any amendments thereto, shall be delivered to Purchaser as soon
as practical after execution of this Agreement. Seller agrees
to provide Purchaser with SCHEDULE 2.4 for attachment hereto,
on or before March 15, 1999.

2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's
telephone numbers. Purchaser shall receive all sales and
service files and parts records, customer lists, computer files
containing sales and service files, parts records and customer
lists and all other information and documents which are
necessary and/or which might be useful in the furtherance of
the dealership business (Seller shall retain its employee
personnel files, general ledgers, sub-ledgers, canceled checks,
journals, vouchers, tax returns and other accounting ledgers.).
Purchaser agrees to pay Seller for the goodwill, the sum of
Four Million Two Hundred Thirty Five Thousand Nine Hundred
Fifty Five and No/100 Dollars ($4,235,955.00).

3. Supplemental Agreements.

3.2. Seller's Name. Seller shall assign all rights to the name "Gene
Messer Toyota" to Purchaser. Purchaser may not assign this Agreement or any
right hereunder to any unrelated

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third party. Seller values its name and reputation in the community, has
investigated Group 1 and its management and believes that Group 1 and Purchaser
will preserve and carry forward the name and reputation that Seller, and its
primary owner, Gene Messer, whose name is used in the business, has established
in its community for many years. Purchaser and Group 1 agree that it will not
assign this Agreement or any rights hereunder to any unrelated third party, and
in the event that substantially all of the assets of the Dealership or the
equity ownership of the Dealership are acquired by any party other than Group 1
or an entity controlled by Group 1, the name "Messer" shall immediately cease to
be used in the promotion and name of the dealership so acquired by the third
party. In the event there is an adverse change in the operations to the extent
that the integrity of the name Gene Messer is impacted, Seller shall have the
opportunity to request the Board of Directors of Group 1 ("Board"), that the
name "Messer" be removed from the dealership within a reasonable period of time.
After due consideration of the facts and circumstances of this request, the
decision of the Board will be final.

3.3. Prepaids. Seller shall retain all prepaid accounts, provided however,
that Seller and Purchaser may review the prepaid accounts and transfer any such
prepaid accounts as they determine mutually beneficial, at the amount agreed to
by them.

3.4. Liabilities. Purchaser is not assuming the floor plan liabilities of
Seller. As of the Closing Date, Seller and Purchaser shall obtain the complete
release and discharge of the floor plan liability secured by liens on vehicles
or other assets conveyed under this Agreement. Purchaser is not assuming any
other liabilities of Seller, except as otherwise provided herein.

3.5. Retail Orders. On the Closing Date, Seller shall turn over or assign
by proper and appropriate instruments to Purchaser all unfulfilled retail orders
and customer deposits attributable thereto, held by Seller as of the Closing
Date. Purchaser shall assume such retail orders and responsibility to the
customer for making future delivery of any vehicle covered by the orders.

3.6. Allocation of Purchase Price. Purchaser and Seller agree that the
purchase price is allocated for the purposes of Section 1060 of the Internal
Revenue Code 1986, as amended, in accordance with the value set forth for each
class of asset and for each corporation, as listed on the attached EXHIBIT "A"
("Allocation of Purchase Price"). The parties hereto agree that each of them
will timely file with the Internal Revenue Service Form 8594 and that all tax
returns or other tax information any party hereto files or cause to be filed
with any governmental agency including the Internal Revenue Service, will be
prepared in a manner that is consistent with this section.

3.7. Property Taxes. All real and personal property taxes on property owned
or leased by Seller, which are not covered by the VIT (as hereinafter defined),
for the current year shall be prorated to the Closing Date. If the amount of
property taxes for the current tax year has not been fixed by the Closing Date,
the proration of such taxes shall be based upon the preceding tax year's
assessment. Purchaser shall receive the prorated taxes and shall pay the full
tax amount when due. Purchaser shall collect and remit the "vehicle inventory
tax" under Section 23.122 of the Texas Property Tax Code ("VIT") on each vehicle
sold by Purchaser after the Closing Date through December 31, 1999. All such
remittances shall be applied to the 1999 VIT liability of

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<PAGE> 6

the Dealership. If the aggregate of all remittances is not sufficient to fully
discharge Dealership's liability, Seller shall be liable for the balance of tax
owing.

3.8. Information Releases. Purchaser and the Seller will jointly prepare
and issue all releases of information relating to the sale. Subject to the prior
sentence, if inquiries are made by any person with respect to any transaction
contemplated by this Agreement, Seller and Purchaser will consult each other
prior to responding to such inquiries.

3.9. Business Records. Seller shall not copy or remove any of the records
described in Section 2.10 from the dealership premises prior to the Closing Date
and shall return any of such records previously removed. Seller agrees that such
information is extremely important to Purchaser and promises to retain such
information in strict confidence and will not disclose any such information to
Purchaser's competitors or other parties. Purchaser agrees that Purchaser will
retain such information for a period not less than seven (7) years after the
Closing Date and that Seller and Seller's representatives may have access to
review and copy such information during Purchaser's regular business hours if
such information is necessary for Seller's business purposes. Purchaser and its
representatives may have access to review and copy any records retained by
Seller during Seller's regular business hours if such information is necessary
in Purchaser's operation of the dealership business after Closing. Seller agrees
to remove all retained records from the Dealership Location with thirty (30)
days after the Closing Date. If Purchaser wishes to destroy any of the business
records transferred by Seller, within Seven (7) years of the Closing Date,
Purchaser shall notify Seller prior to such destruction, in order that Seller
may retain such records.

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3.17. Right of First Refusal. If within Ten (10) years of the Closing Date,
Purchaser agrees to transfer the Sales and Service Agreement for Toyota
("Franchise") to an independent third party (an entity not owned or controlled
by Group 1), in a transaction that is not part of the Manufacturer's channelling
or alignment programs (e.g. "Project 2000"), any such agreement shall be subject
to the terms and provisions of this Section 3.17 and Seller shall have the right
of first refusal upon such assets transferred. If Purchaser enters into an
agreement to transfer the Franchise ("Transfer Agreement") in a transaction
which is subject to this right of first refusal, then Purchaser shall deliver a
copy of the Transfer Agreement together with the financial and operating
information provided to the prospective transferee, to Seller ("Notice"). Seller
will

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<PAGE> 8

have thirty (30) days from the Notice date to exercise Seller's right to
assume the prospective transferee's position under the Transfer Agreement. If
Seller exercises the right of first refusal, Seller must comply with all terms,
conditions and covenants of the Transfer Agreement. If Seller does not respond
to the Notice within thirty (30) days it will be deemed refused by Seller. If
Seller does not exercise the right of first refusal, then Purchaser may complete
the transaction contemplated in the Transfer Agreement, upon the terms and
conditions contained therein. If Purchaser does not close the transaction
contemplated in the Transfer Agreement within One Hundred Eighty (180) days,
then Seller's right of first refusal on such assets shall be reinstated.

4. Conditions to Sale.

4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for a new Sales and Service Agreement for Toyota.

4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.

4.1.6. Execution and delivery of a lease agreement in the form
attached hereto as Exhibit "B" for the Dealership Location
("Lease Agreement").

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<PAGE> 9

4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.1.11. The applicable waiting period under the HSR Act with respect to
the transactions contemplated by this Agreement shall have
expired or been terminated.

(a) Due incorporation and existence of Seller and the
corporate power of Seller to execute, deliver and perform
the Asset Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Bill of Sale and Lease (as to the
Stockholders of Seller and entities controlled by them
which are party to the Lease).

(d) Absence of any violation of the charter or by-laws of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.

4.1.13. Closing of the transactions contemplated in the Related
Agreements.

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4.2.2. Execution and delivery of the Lease Agreement and related lease
guaranty in the form attached hereto as Exhibit "D" ("Lease
Guaranty").

4.2.3. Execution and delivery of the Employment Agreements.

4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Lease, and related Lease Guaranty
agreement.

4.2.6. Closing of the transactions contemplated in the Related
Agreements.

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5. Closing.

5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Bill of Sale").

5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.

5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.

5.2.5. A certificate of corporate existence in good standing for
Seller from the State of Texas dated within thirty (30) days of
the Closing Date.

5.2.7. Possession of the Assets.

5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

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5.2.9. Executed Lease Agreement.

5.2.10. Executed Employment Agreements.

5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.

5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.3. Actions of Purchaser at Closing. At the Closing, Purchaser
shall deliver the following:

5.3.1. Payment for the Purchase Price of the Assets less the Earnest
Money, and release any claim to the Earnest Money ("Closing
Payment"), as follows:

(a) The number of shares of Group 1 Common Stock equal to (x) One
Million Two Hundred Fifty Thousand and no/100 Dollars
($1,250,000.00), divided by (y) the average closing price of
the Group 1 Common Stock on the New York Stock Exchange for the
Five (5) consecutive trading days ended on the third trading
day prior to the Closing Date. The stock certificates
representing the Group 1 Common Stock shall be delivered to the
Stockholders within Five (5) business days after the Closing
Date. No fractional shares of Group 1 Common Stock will be
issued, but in lieu thereof, Seller shall receive cash for any
fractional shares.

(b) Immediately available funds to Seller in the amount of Purchase
Price less: (i) the Earnest Money, and (ii) One Million Two
Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00),
shall be delivered (or wired) to Seller on the Closing Date.

5.3.4. A certificate of existence for Purchaser from the State of
Delaware.

5.3.5. Executed Lease Agreement and Lease Guaranty.

5.3.6. Executed Employment Agreements.

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5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.

5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

6.1. Purchaser. Purchaser represents and warrants to Seller as
follows:

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6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.

6.1.7. Purchaser acknowledges and represents and warrants to Seller,
that Purchaser, either directly or through affiliates, has
purchased automobile dealerships, and continues to own and
operate automobile dealerships. As a result, Purchaser is
knowledgeable and familiar with all aspects of purchasing,
owning and operating automobile dealership, and the potential
economic consequences (favorable and unfavorable) that can
occur in the purchase and operation of an automobile
dealership. Purchaser shall conduct its own due diligence and
shall rely solely on its own inspection, examination and
investigation in making the decision to purchase the Assets and
enter in the transaction described in or contemplated by this
Agreement, and Purchaser acknowledges that no independent
investigation or verification has been or will be made by any
of the Seller with respect to the accuracy or completeness of
the information supplied by any Seller concerning any of the
Assets and of Seller's business. Except for the warranty of
title contained in the bill of Sale and the representations and
warranties contained in Section 6.2, Seller expressly disclaims
any and all representations, warranties, or guarantees, of any
kind, oral or written, express or implied, including, without
limitation the value, condition, merchantability,
marketability, suitability or fitness for a particular use or
purpose of any of the Assets. Seller is not, and will not make
any representation or warranty express or implied, as to future
profitability of the Dealership or whether Purchaser will be
able to retain any or all of those franchises if they are so
transferred to Purchaser.

6.2. Seller's. Seller represents and warrants to Purchaser as
follows:

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regulation to which Seller is or will be subject to whereby
either them or any of the Assets conveyed pursuant to this
Agreement is bound.

6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.

6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.

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otherwise dispose of any of those shares in connection with any distribution
(except by way of gift to a charitable foundation, provided that such foundation
executes a customary investor representation letter with respect to exemptions
from the Securities Act of 1933 ("Securities Act") and any applicable state blue
sky laws); (ii) such Stockholder is not a party to any agreement or other
arrangement for the disposition of any shares of Group 1 Common Stock; (iii)
such Stockholder is an "accredited investor" as defined in Securities Act Rule
501(a); (iv) such Stockholder (A) is able to bear the economic risk of an
investment in the Group 1 Common Stock acquired pursuant to this Agreement, (B)
can afford to sustain a total loss of that investment, (C) has such acknowledge
and experience in financial and business matters, and such past participation in
investment that he or she is capable of evaluating the merits and risks of the
proposed investment in the Group 1 Common Stock, (D) has received and reviewed
the SEC Documents, (E) has had an adequate opportunity to ask questions and
receive answers from the officers of Group 1 concerning any and all matters
relating to the transactions contemplated hereby, including the background and
experience of the current officers and directors of Group 1, the plans for
operations of the business of Group 1, the business, operations and financial
condition of Group 1 and any plans of Group 1 for additional acquisitions, and
(F) has asked all questions of the nature described in the preceding clause (E),
and all those questions have been answered to his or her satisfaction; (v) such
Stockholder acknowledges that the shares of Group 1 Common Stock to be delivered
to such Stockholder pursuant to the Acquisition have not been and will not be
registered under the Securities Act or qualified under applicable blue sky laws
and therefore may not be resold by such Stockholder without compliance with Rule
144 of the Securities Act; (vi) such Stockholder, if a corporation, partnership,
trust or other entity, acknowledges that it was not formed for the specific
purpose of acquiring the Group 1 Common Stock; and (viii) without limiting all
of the foregoing, such Stockholder agrees not to dispose of any portion of Group
1 Common Stock unless (1) a registration statement under the Securities Act is
in effect as to the applicable shares and the disposition is made in accordance
with that registration statement, or (2) the Stockholder has notified Group 1 of
the proposed disposition, disposition is made though Merrill, Lynch, Pierce,
Fenner & Smith Incorporated or Goldman, Sachs & Co., Inc., or any of their
successors or affiliates, subject to SEC Rule 144 and such disposition is made
in compliance with any other requirements of the Securities Act. SEC Documents
means, Group 1's most recent annual report, definitive proxy statement filed
with the annual report and Form 10-K.

7.2. Restrictions on Transfer of Group 1 Common Stock.

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straddle or similar market transactions). Notwithstanding the
foregoing, Wessels may: (i) pledge shares of Group 1 Common
Stock, provided that the pledgee of such shares shall agree not
to sell or otherwise dispose of any such shares for the
Restricted Period; (ii) transfer shares to immediate family
members or the estate of any such individual (including without
limitation, any transfer by Wessels to or among any trust,
custodial or other similar accounts or funds that are for the
benefit of his or her immediate family members), provided that
such person or entity shall agree not to sell or otherwise
dispose of any such shares for the Restricted Period; and (iii)
transfer shares by will or laws of descent and distribution or
otherwise by reason of such Wessels death. The certificates
evidencing the Group 1 Common Stock delivered to Wessels
pursuant to this Agreement will bear a legend substantially in
the form set forth below and containing such other information
as Group 1 may deem necessary or appropriate:

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8. Indemnification.

8.1. Purchaser's Obligation to Indemnify. Purchaser shall indemnify
and hold Seller harmless from and against any and all liability, loss, damage,
or deficiency resulting from: (i) any misrepresentation, breach of warranty, or
nonfulfillment of any agreement on the part of Purchaser under this Agreement;
(ii) any misrepresentations in or occasioned by any certificate, document, or
other instrument furnished or to be furnished by Purchaser herein; (iii)
Purchaser's ownership, management and conduct of the Assets subsequent to
Closing; (iv) any misrepresentation, inaccuracy, or failure of any
representation or warranty of Purchaser; and (v) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs, and expenses,
including without limitation, legal fees and expenses incident to any of the
foregoing or incurred in investigating or attempting to void the same or to
oppose the imposition thereof or in enforcing this indemnity.

8.2. Seller's Obligation to Indemnify. Seller agrees to indemnify,
defend and hold Group 1 and Purchaser harmless (subject to the limitations and
conditions set forth in Sections 8.3 and 8.4) from all Indemnifiable Damages (as
defined below) resulting from: (i) any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller under this Agreement; (ii)
any misrepresentation in or occasioned by any certificate, document, or other
instrument or to be furnished by Seller herein; (iii) except for liabilities
otherwise assumed, the ownership, management, and operations of, and interests
in or to the Assets prior to the Closing of this Agreement; (iv) any
misrepresentation, inaccuracy, or failure of any representation or warranty of
Seller; and (v) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including without limitation, legal
fees and expenses incident to any of the foregoing or incurred in investigating
or attempting to void the same or to oppose the imposition thereof or in
enforcing this indemnity. Each Stockholder will agree to indemnify, defend and
hold Group 1 harmless (subject to the limitations in Section 8.3 and 8.4) from
all Indemnifiable Damages resulting from such Stockholder's breach of Section 7.

8.3. Notice to Indemnifying Party. To be entitled to such
indemnification, the party claiming indemnification ("Indemnified Party") shall
give the other party ("Indemnifying Party") prompt written notice of the
assertion by a third party of any claim with respect to which the Indemnified
Party might bring a claim for indemnification herein, and in all events must
have supplied such notice to the Indemnifying Party within the applicable period
for defense of such claim. This indemnification shall survive the consummation
of the transactions contemplated herein and shall remain in effect for a period
of four (4) years after the Closing Date. The remedies provided under this
section shall be cumulative and shall not preclude any party from asserting any
other rights or seeking any other remedies against any other party hereto. At
the option of the Indemnifying Party, sums due under this section may be offset
against any sums which may be due the Indemnified Party under Any Other
Agreement between them.

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9. Provisions Respecting Employees.

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<PAGE> 20

10. General Provisions.

<TABLE>
<S> <C>
If to Seller: Messer, Wessels and Messer, Inc.
c/o Gene Messer Ford, Inc.
600 W. 19th Street
Lubbock, Texas 79416
Attn: Greg Wessels

with a copy to: Stephen T. Krier, Esq.
2112 Indiana
Lubbock, Texas 79410-1499

If to Purchaser: Delaware Acquisitions - T, L.L.C.
c/o Robert E. Howard II
P.O. Box 14508
Oklahoma City, Oklahoma, 73113-0508

with a copy to: Randall K. Calvert, Esq.
6520 N. Western, Suite 100
Oklahoma City, Oklahoma 73116
</TABLE>

or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.

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10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.

10.9. Amendment. This Agreement may not be amended by any oral agreement or
understanding but only by an amendment in writing executed by the parties
hereto.

10.13. Headings. The section headings contained in this Agreement are for
convenience only and shall not affect in any way the meaning or interpretation
of the Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.

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<PAGE> 22

"PURCHASER"
Delaware Acquisitions - T, L.L.C.,
a Delaware limited liability company

By: /s/ ROBERT E. HOWARD II
----------------------------------------------
Robert E. Howard II, Manager

"SELLER"
Messer, Wessels and Messer, Inc.
a Texas corporation

By: /s/ GENE MESSER
----------------------------------------------
Gene Messer, Vice President

<PAGE> 23

ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED
-----------------------------------------

<TABLE>
<S> <C>
Class I Cash and Cash Equivalents $

Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $

Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $

Class IV All Section 197 intangibles, except those in the
nature of goodwill $

Class V Goodwill $

Total of Classes, I, II, III, IV, and V $
</TABLE>

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

1. Date of Sale: ,1999.
----------

2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:

Yes No
------- ---------
3. Were any of the following purchased or entered into:

License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?

Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.

PURCHASER: SELLER:
Delaware Acquisitions - T, L.L.C. Messer, Wessels and Messer, Inc.
Taxpayer ID No. Taxpayer ID No. 75-2481238
--------------------

BY: BY:
------------------------------- -------------------------------

<PAGE> 24

ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT

<PAGE> 25

ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - WESSELS

<PAGE> 26

ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - MESSER

<PAGE> 27

ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY

<PAGE> 28

ASSET PURCHASE AGREEMENT
EXHIBIT "E"
BILL OF SALE

<PAGE> 29

ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST

<PAGE> 30

ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST

<PAGE> 31

ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES

<PAGE> 32

ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS

<PAGE> 33

ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES

<PAGE> 34

ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS

<PAGE> 1

EXHIBIT 10.6

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Rockwall Ford-Mercury, Ltd., a Texas limited partnership ("Seller"), and
Delaware Acquisitions - F, L.L.C., a Delaware limited liability company
("Purchaser").

EXPLANATORY STATEMENT

WHEREAS, Seller is presently a party to a Sales and Service Agreement with
Ford Motor Company ("Ford" and "Mercury") ("Manufacturer"); which provide for
the sale and service of Ford and Mercury vehicles ("Dealership") at 990 E. I-30,
Rockwall, Texas 75087 (the "Dealership Location"); and

WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Ford and Mercury
dealer at the Dealership Location.

WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;

WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;

WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;

-1-
<PAGE> 2

2.1.Purchase Price. The purchase price for the Assets to be sold and
transferred by Seller to Purchaser shall be the total of the items listed in
Sections 2.1.1. through 2.1.10. (collectively, the "Purchase Price"):

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<PAGE> 3

2.1.2. Purchaser will purchase all of the used vehicle inventory of
Seller, which are less than Seventy Five (75) days old, at the
book value of the vehicles, as reflected on Seller's books,
less the "Pack" added to the book value of the vehicles by
Seller. Purchaser will purchase all of the used vehicle
inventory of Seller, which is more than Seventy Five (75) days
old, at the current wholesale market value of the vehicles as
determined by the Purchaser, provided that Seller may retain
any of said used vehicles if Seller is not satisfied with the
valuation established. Seller shall deliver titles to all used
vehicles within One Hundred Twenty (120) days after the Closing
Date. Seller guarantees the delivery of the used car titles to
Purchaser. If Seller is unable to deliver the title to a
vehicle within One Hundred Twenty (120) days after the Closing
Date, Seller will repurchase the vehicle.

2.1.3. Purchaser agrees to purchase Seller's actual verifiable
inventory of new, unused, undamaged and non-obsolete
Manufacturer's parts and accessories. Purchase Price will be
those dealer prices in accordance with the Manufacturer's Price
Schedules in effect on the Closing Date. Seller shall assign to
Purchaser the termination rights provided by each
Manufacturer's Sales and Service Agreement, to the extent same
exist or are assignable. In the alternative, Seller agrees to
allow Purchaser to exercise any and all Seller's termination
rights in Seller's name.

2.1.4. Purchaser agrees to purchase Seller's actual verifiable
inventory of after-market parts and accessories. The Purchase
Price will be the dealer's actual cost.

2.1.6. Purchaser shall purchase all oil and grease in Seller's
possession at Seller's cost.

-3-
<PAGE> 4

if omitted from SCHEDULE 2.1, unless said asset is specifically
listed on SCHEDULE 2.2 ("Retained Assets") attached hereto, in
which case the asset shall be retained by Seller. Seller agrees
to provide Purchaser with SCHEDULES 2.1 and SCHEDULE 2.2 for
attachment hereto, on or before March 15, 1999.

2.1.8. Seller will transfer to Purchaser all parts catalogues, service
manuals, films, videos, instructional materials, vehicle
literature, supplies and other assets used in the sales or
service of Ford and Mercury vehicles and used vehicles ("Other
Assets") (specifically excluding Retained Assets") whether or
not such assets are considered fixed assets or are reported as
such on Seller's books and records or listed on the attached
SCHEDULE 2.1. Purchaser shall purchase the Other Assets of
Seller for Five Thousand and no/100 Dollars ($5,000.00).

2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations
for the computer, telephone, copier, and manufacturer required
leased equipment. In addition Purchaser will assume other
leases not otherwise described above with a total monthly
obligation not to exceed One Thousand and no/100 Dollars
($1,000.00) per month, in the aggregate. A copy of the lease
agreements and contract listed on SCHEDULE 2.4, together with
any amendments thereto, shall be delivered to Purchaser as soon
as practical after execution of this Agreement. Seller agrees
to provide Purchaser with SCHEDULE 2.4 for attachment hereto,
on or before March 15, 1999.

2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's
telephone numbers. Purchaser shall receive all sales and
service files and parts records, customer lists, computer files
containing sales and service files, parts records and customer
lists and all other information and documents which are
necessary and/or which might be useful in the furtherance of
the dealership business (Seller shall retain its employee
personnel files, general ledgers, sub-ledgers, canceled checks,
journals, vouchers, tax returns and other accounting ledgers.).
Purchaser agrees to pay Seller for the goodwill, the sum of
Seven Million Three Hundred Sixty One Thousand One Hundred
Ninety Eight and No/100 Dollars ($7,361,198.00).

2.2.Liens and Encumbrances. All Assets will be transferred free of any
liens or encumbrances, except for the obligations which Purchaser agrees to
assume, as listed on the attached Schedule 2.3 ("Assumed Liabilities").

-4-
<PAGE> 5

3. Supplemental Agreements.

3.1. Maintenance of Business Prior to Closing. Seller agrees that prior to
Closing it shall operate its business in a manner consistent with prior business
practice. In connection therewith, the parties agree that Seller may dealer
trade vehicles for similar models, but Seller shall not liquidate or otherwise
dispose of any of its new vehicles other than in the ordinary course of business
to retail buyers. Seller agrees to maintain its advertising expenditures and
activities commensurate with prior business practices. Seller shall not
advertise a "Going Out of Business" sale. Seller agrees to pay (or contest, if
disputed) Seller's trade payables, including Seller's telephone and yellow pages
bills, through the Closing Date. All revenue and expenses prior to Closing shall
be the benefit and burden of Seller.

3.2. Seller's Name. Seller shall assign all rights to the name "Rockwall
Ford" to Purchaser. Purchaser may not assign this Agreement or any right
hereunder to any unrelated third party. Seller values its name and reputation in
the community, has investigated Group 1 and its management and believes that
Group 1 and Purchaser will preserve and carry forward the name and reputation
that Seller, and its primary owner, Gene Messer, whose name is used in the
business, has established in its community for many years. Purchaser and Group 1
agree that it will not assign this Agreement or any rights hereunder to any
unrelated third party, and in the event that substantially all of the assets of
the Dealership or the equity ownership of the Dealership are acquired by any
party other than Group 1 or an entity controlled by Group 1, the name "Messer"
shall immediately cease to be used in the promotion and name of the dealership
so acquired by the third party. In the event there is an adverse change in the
operations to the extent that the integrity of the name Gene Messer is impacted,
Seller shall have the opportunity to request the Board of Directors of Group 1
("Board"), that the name "Messer" be removed from the dealership within a
reasonable period of time. After due consideration of the facts and
circumstances of this request, the decision of the Board will be final.

3.3. Prepaids. Seller shall retain all prepaid accounts, provided however,
that Seller and Purchaser may review the prepaid accounts and transfer any such
prepaid accounts as they determine mutually beneficial, at the amount agreed to
by them.

3.4. Liabilities. Purchaser is not assuming the floor plan liabilities of
Seller. As of the Closing Date, Seller and Purchaser shall obtain the complete
release and discharge of the floor plan liability secured by liens on vehicles
or other assets conveyed under this Agreement. Purchaser is not assuming any
other liabilities of Seller, except as otherwise provided herein.

3.5. Retail Orders. On the Closing Date, Seller shall turn over or assign
by proper and appropriate instruments to Purchaser all unfulfilled retail orders
and customer deposits attributable thereto, held by Seller as of the Closing
Date. Purchaser shall assume such retail orders and responsibility to the
customer for making future delivery of any vehicle covered by the orders.

-5-
<PAGE> 6

3.7. Property Taxes. All real and personal property taxes on property
owned or leased by Seller, which are not covered by the VIT (as hereinafter
defined), for the current year shall be prorated to the Closing Date. If the
amount of property taxes for the current tax year has not been fixed by the
Closing Date, the proration of such taxes shall be based upon the preceding tax
year's assessment. Purchaser shall receive the prorated taxes and shall pay the
full tax amount when due. Purchaser shall collect and remit the "vehicle
inventory tax" under Section 23.122 of the Texas Property Tax Code ("VIT") on
each vehicle sold by Purchaser after the Closing Date through December 31, 1999.
All such remittances shall be applied to the 1999 VIT liability of the
Dealership. If the aggregate of all remittances is not sufficient to fully
discharge Dealership's liability, Seller shall be liable for the balance of tax
owing.

3.8. Information Releases. Purchaser and the Seller will jointly prepare
and issue all releases of information relating to the sale. Subject to the prior
sentence, if inquiries are made by any person with respect to any transaction
contemplated by this Agreement, Seller and Purchaser will consult each other
prior to responding to such inquiries.

3.9. Business Records. Seller shall not copy or remove any of the records
described in Section 2.10 from the dealership premises prior to the Closing Date
and shall return any of such records previously removed. Seller agrees that such
information is extremely important to Purchaser and promises to retain such
information in strict confidence and will not disclose any such information to
Purchaser's competitors or other parties. Purchaser agrees that Purchaser will
retain such information for a period not less than seven (7) years after the
Closing Date and that Seller and Seller's representatives may have access to
review and copy such information during Purchaser's regular business hours if
such information is necessary for Seller's business purposes. Purchaser and its
representatives may have access to review and copy any records retained by
Seller during Seller's regular business hours if such information is necessary
in Purchaser's operation of the dealership business after Closing. Seller agrees
to remove all retained records from the Dealership Location with thirty (30)
days after the Closing Date. If Purchaser wishes to destroy any of the business
records transferred by Seller, within Seven (7) years of the Closing Date,
Purchaser shall notify Seller prior to such destruction, in order that Seller
may retain such records.

-6-
<PAGE> 7

3.11. Confidentiality. Group 1, Purchaser, Seller and Partners agree, and
they agree to cause their partners, officers, directors, employees,
representatives and consultants, to hold in confidence and not to disclose to
others for any reason whatsoever, any and all non-public information received by
it or its representatives in connection with this transaction, including but not
limited to all terms, conditions and agreements related to this transaction,
except (i) as required by law; and (ii) for disclosure to officers, directors,
employees, attorneys, accountants and other representatives of Seller as
necessary in connection with the transactions contemplated hereby or as
necessary to the operation of Seller's business. In the event the transactions
contemplated by this Agreement are not consummated, Seller will return all
non-public documents and other material obtained from Purchaser or its
representatives in connection with the transactions contemplated hereby or
certify to Purchaser that all such information has been destroyed. Neither party
will make a public statement without the other parties consent.

3.16. Expenses. Regardless of whether the transaction contemplated herein
is consummated, all costs and expenses in connection with this Agreement and the
transactions

-7-
<PAGE> 8

contemplated hereby incurred by Purchaser shall be paid by Purchaser and all
such costs and expenses incurred by Sellers and Partners shall be paid by the
Sellers; provided, however, that Group 1 shall pay for all costs associated with
(i) preparation of the HSR Act filing and the HSR filing fees; and (ii)
application and approval process with the Manufacturer.

3.17. Right of First Refusal. If within Ten (10) years of the Closing Date,
Purchaser agrees to transfer the Sales and Service Agreement for Ford and
Mercury ("Franchise") to an independent third party (an entity not owned or
controlled by Group 1), in a transaction that is not part of the Manufacturer's
channelling or alignment programs (e.g. "Project 2000"), any such agreement
shall be subject to the terms and provisions of this Section 3.17 and Seller
shall have the right of first refusal upon such assets transferred. If Purchaser
enters into an agreement to transfer the Franchise ("Transfer Agreement") in a
transaction which is subject to this right of first refusal, then Purchaser
shall deliver a copy of the Transfer Agreement together with the financial and
operating information provided to the prospective transferee, to Seller
("Notice"). Seller will have thirty (30) days from the Notice date to exercise
Seller's right to assume the prospective transferee's position under the
Transfer Agreement. If Seller exercises the right of first refusal, Seller must
comply with all terms, conditions and covenants of the Transfer Agreement. If
Seller does not respond to the Notice within thirty (30) days it will be deemed
refused by Seller. If Seller does not exercise the right of first refusal, then
Purchaser may complete the transaction contemplated in the Transfer Agreement,
upon the terms and conditions contained therein. If Purchaser does not close the
transaction contemplated in the Transfer Agreement within One Hundred Eighty
(180) days, then Seller's right of first refusal on such assets shall be
reinstated.

4. Conditions to Sale.

4.1.Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser with respect to actions to be taken by Purchaser at or before the
Closing are subject to the satisfaction, or the written waiver by the Purchaser
of each of the following conditions:

4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for new Sales and Service Agreements for Ford and Mercury.

-8-
<PAGE> 9

4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.

4.1.6. Execution and delivery of a lease agreement in the form
attached hereto as Exhibit "B" for the Dealership Location
("Lease Agreement").

4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.1.11. The applicable waiting period under the HSR Act with respect to
the transactions contemplated by this Agreement shall have
expired or been terminated.

(a) Due organization and existence of Seller and Seller's
general partner, the power of Seller to execute, deliver
and perform the Asset Purchase Agreement.

-9-
<PAGE> 10

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Bill of Sale and Lease (as to the
Partners of Seller and entities controlled by them which
are party to the Lease).

(d) Absence of any violation of the partnership agreement of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.

4.1.13. Closing of the transactions contemplated in the Related
Agreements.

4.2.2. Execution and delivery of the Lease Agreement and related lease
guaranty in the form attached hereto as Exhibit "D" ("Lease
Guaranty").

4.2.3. Execution and delivery of the Employment Agreements.

4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.2.5. Seller shall have received the opinion of Purchaser's legal
counsel, as of the Closing Date and satisfactory in form and
substance to Sellers, Partners and their counsel, as to the
following items, with customary qualifications and in reliance
upon documents customarily relied upon in giving such opinions.
Such opinion may be limited to matters governed by the federal
laws of the United States and the laws of the states of
Delaware and Texas.

(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Lease, and related Lease Guaranty
agreement.

-10-
<PAGE> 11

4.2.6. Closing of the transactions contemplated in the Related
Agreements.

5. Closing.

5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Bill of Sale").

5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.

5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.

5.2.4. A certificate executed by Seller's general partner certifying
that, as of the Closing Date, all of the representations and
warranties of Seller are true and correct in all respects and
that each and every covenant and agreement to be performed by
Seller prior to or as of the Closing Date pursuant to this
agreement has been performed in all respects.

5.2.5. A certificate of good standing for Seller from the State of
Texas dated within thirty (30) days of the Closing Date.

5.2.6. A copy of certificate adopted by Seller authorizing and
approving Seller's performance of the transaction contemplated
herein and the execution and delivery

-11-
<PAGE> 12

of all documents in connection with such transactions,
certified by the secretary of Seller, as true in full force as
of the Closing Date.

5.2.7. Possession of the Assets.

5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.2.9. Executed Lease Agreement.

5.2.10. Executed Employment Agreements.

5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.

5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.3. Actions of Purchaser at Closing. At the Closing, Purchaser
shall deliver the following:

5.3.1. Payment for the Purchase Price of the Assets less the Earnest
Money, and release any claim to the Earnest Money ("Closing
Payment"), as follows:

(a) The number of shares of Group 1 Common Stock equal to (x) Two
Million Two Hundred Fifty Thousand and no/100 Dollars
($2,250,000.00), divided by (y) the average closing price of
the Group 1 Common Stock on the New York Stock Exchange for the
Five (5) consecutive trading days ended on the third trading
day prior to the Closing Date. The stock certificates
representing the Group 1 Common Stock shall be delivered to the
Partners within Five (5) business days after the Closing Date.
No fractional shares of Group 1 Common Stock will be issued,
but in lieu thereof, Seller shall receive cash for any
fractional shares.

(b) Immediately available funds to Seller in the amount of Purchase
Price less: (i) the Earnest Money, and (ii) Two Million Two
Hundred Fifty Thousand and no/100 Dollars ($2,250,000.00),
shall be delivered (or wired) to Seller on the Closing Date.

-12-
<PAGE> 13

5.3.4. A certificate of existence for Purchaser from the State of
Delaware.

5.3.5. Executed Lease Agreement and Lease Guaranty.

5.3.6. Executed Employment Agreements.

5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.

5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

6.1. Purchaser. Purchaser represents and warrants to Seller as
follows:

-13-
<PAGE> 14

6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.

6.2. Seller's. Seller represents and warrants to Purchaser as
follows:

6.2.1. Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
Texas. Seller is qualified to do business in Texas, and Seller
has all requisite authority and power to enter into this
Agreement. Furthermore, Seller is duly authorized to own, lease
or otherwise hold the Assets conveyed under this Agreement. The
execution, delivery and performance of this Agreement by Seller
and the consummation by Seller of the transactions contemplated
herein have been authorized by all requisite partnership
actions on the part of the Seller. This Agreement constitutes
the valid and binding obligation of Seller, enforceable in
accordance with its terms.

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<PAGE> 15

6.2.2. Neither the execution or delivery of this Agreement by Seller
nor the consummation by Seller of the transactions contemplated
herein will (i) conflict with or result in a breach of, the
terms, conditions or provisions of, or constitute a default
under, or result in the creation of a lien or encumbrance on
any of the property conveyed pursuant to this Agreement,
pursuant to the certificate of limited partnership or
partnership agreement of Seller, or any indenture, mortgage,
lease, agreement or other instrument to which Seller is a party
or by which any of the Assets conveyed pursuant to this
Agreement may be bound or affected; or (ii) violate any law or
regulation to which Seller is or will be subject to whereby
either them or any of the Assets conveyed pursuant to this
Agreement is bound.

6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.

6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.

7. Additional Representations and Warranties of Seller and the Partners.
Prior to Closing, Seller will cause each Partner to execute an agreement in
which each Partner, severally and not jointly, represents and warrants to
Purchaser and Group 1 that:

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<PAGE> 16

7.1.Investment Intent. The Seller intends to distribute some or all of the
Closing Payment to its Partners on or shortly after the Closing Date. The Seller
and each Partner makes the following representations relating to his, her or its
acquisition of shares of Group 1 Common Stock: (i) such Partner will be
acquiring the shares of Group 1 Common Stock to be issued pursuant to the
Acquisition to such Partner solely for such Partner's account, for investment
purposes only and with no current intention or plan to distribute, sell or
otherwise dispose of any of those shares in connection with any distribution
(except by way of gift to a charitable foundation, provided that such foundation
executes a customary investor representation letter with respect to exemptions
from the Securities Act of 1933 ("Securities Act") and any applicable state blue
sky laws); (ii) such Partner is not a party to any agreement or other
arrangement for the disposition of any shares of Group 1 Common Stock; (iii)
such Partner is an "accredited investor" as defined in Securities Act Rule
501(a); (iv) such Partner (A) is able to bear the economic risk of an investment
in the Group 1 Common Stock acquired pursuant to this Agreement, (B) can afford
to sustain a total loss of that investment, (C) has such acknowledge and
experience in financial and business matters, and such past participation in
investment that he or she is capable of evaluating the merits and risks of the
proposed investment in the Group 1 Common Stock, (D) has received and reviewed
the SEC Documents, (E) has had an adequate opportunity to ask questions and
receive answers from the officers of Group 1 concerning any and all matters
relating to the transactions contemplated hereby, including the background and
experience of the current officers and directors of Group 1, the plans for
operations of the business of Group 1, the business, operations and financial
condition of Group 1 and any plans of Group 1 for additional acquisitions, and
(F) has asked all questions of the nature described in the preceding clause (E),
and all those questions have been answered to his or her satisfaction; (v) such
Partner acknowledges that the shares of Group 1 Common Stock to be delivered to
such Partner pursuant to the Acquisition have not been and will not be
registered under the Securities Act or qualified under applicable blue sky laws
and therefore may not be resold by such Partner without compliance with Rule 144
of the Securities Act; (vi) such Partner, if a corporation, partnership, trust
or other entity, acknowledges that it was not formed for the specific purpose of
acquiring the Group 1 Common Stock; and (viii) without limiting all of the
foregoing, such Partner agrees not to dispose of any portion of Group 1 Common
Stock unless (1) a registration statement under the Securities Act is in effect
as to the applicable shares and the disposition is made in accordance with that
registration statement, or (2) the Partner has notified Group 1 of the proposed
disposition, disposition is made though Merrill, Lynch, Pierce, Fenner & Smith
Incorporated or Goldman, Sachs & Co., Inc., or any of their successors or
affiliates, subject to SEC Rule 144 and such disposition is made in compliance
with any other requirements of the Securities Act. SEC Documents means, Group
1's most recent annual report, definitive proxy statement filed with the annual
report and Form 10-K.

7.2. Restrictions on Transfer of Group 1 Common Stock.

7.2.1. During the Two (2) year period ending on the anniversary of the
Closing Date (the "Restricted Period"), Nicholas Tolbert Rainey
("Rainey") will not voluntarily: (i) sell, assign, exchange,
transfer, encumber, pledge, distribute, appoint or otherwise
dispose of (A) any shares of Group 1 Common Stock received by
Rainey in the Acquisition or (B) any interest in (including any
option to buy or sell) any of those

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<PAGE> 17

shares of Group 1 Common Stock, in whole or in part, and Group
1 will have no obligation to, and shall not, treat any such
attempted transfer as effective for any purpose or (ii) engage
in any transaction, whether or not with respect to any shares
of Group 1 Common Stock or any interest therein, the intent or
effect of which is to reduce the risk of owning the shares of
Group 1 Common Stock acquired pursuant to this Agreement
(including, for example, engaging in put, call, short sale,
straddle or similar market transactions). Notwithstanding the
foregoing, Rainey may: (i) pledge shares of Group 1 Common
Stock, provided that the pledgee of such shares shall agree not
to sell or otherwise dispose of any such shares for the
Restricted Period; (ii) transfer shares to immediate family
members or the estate of any such individual (including without
limitation, any transfer by Rainey to or among any trust,
custodial or other similar accounts or funds that are for the
benefit of his or her immediate family members), provided that
such person or entity shall agree not to sell or otherwise
dispose of any such shares for the Restricted Period; and (iii)
transfer shares by will or laws of descent and distribution or
otherwise by reason of such Rainey death. The certificates
evidencing the Group 1 Common Stock delivered to Rainey
pursuant to this Agreement will bear a legend substantially in
the form set forth below and containing such other information
as Group 1 may deem necessary or appropriate:

7.2.2. Seller and each Partner, severally and not jointly with any
other person, (i) acknowledges that the shares of Group 1
Common Stock to be delivered to Seller and that Partner
pursuant to this Agreement have not been and, if applicable,
will not be registered under the Securities Act and therefore
may not be resold by Seller or that Partner without compliance
with the Securities Act and (ii) covenants that none of the
shares of Group 1 Common Stock issued to Seller or that Partner
pursuant to this Agreement will be offered, sold, assigned,
pledged, hypothecated, transferred or otherwise disposed of
except after full compliance with all the applicable provisions
of the Securities Act and the rules and regulations of the
Commission and applicable state securities laws and
regulations. All certificates evidencing shares of Group 1
Common Stock issued pursuant to this Agreement will bear the
following legend in addition to the legend prescribed by
Section 7.2.1:

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<PAGE> 18

In addition, certificates evidencing shares of Group 1 Common Stock
issued pursuant to the Acquisition to Seller and each Partner will bear any
legend required by the securities or blue sky laws of the state in which
Seller or that Partner resides.

8. Indemnification.

8.2. Seller's Obligation to Indemnify. Seller agrees to indemnify, defend
and hold Group 1 and Purchaser harmless (subject to the limitations and
conditions set forth in Sections 8.3 and 8.4) from all Indemnifiable Damages (as
defined below) resulting from: (i) any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller under this Agreement; (ii)
any misrepresentation in or occasioned by any certificate, document, or other
instrument or to be furnished by Seller herein; (iii) except for liabilities
otherwise assumed, the ownership, management, and operations of, and interests
in or to the Assets prior to the Closing of this Agreement; (iv) any
misrepresentation, inaccuracy, or failure of any representation or warranty of
Seller; and (v) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including without limitation, legal
fees and expenses incident to any of the foregoing or incurred in investigating
or attempting to void the same or to oppose the imposition thereof or in
enforcing this indemnity. Each Partner will agree to indemnify, defend an hold
Group 1 harmless (subject to the limitations in Section 8.3 and 8.4) from all
Indemnifiable Damages resulting from such Partner's breach of Section 7.

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<PAGE> 19

remedies provided under this section shall be cumulative and shall not preclude
any party from asserting any other rights or seeking any other remedies against
any other party hereto. At the option of the Indemnifying Party, sums due under
this section may be offset against any sums which may be due the Indemnified
Party under Any Other Agreement between them.

8.4. Limitation of Indemnity. Notwithstanding anything to the contrary
contained in this Article 8, the Indemnified Party shall have no claim for
Indemnifiable Damages unless and until all Indemnifiable Damages incurred under
this Section 8.4 of each Related Agreement with each Other Company exceeds Two
Hundred Fifty Thousand and no/100 ($250,000.00) ("Basket Amount"), in which
event the Indemnifying Party shall be liable for only such Indemnifiable Damages
in excess of the Basket Amount; provided, however, that the limitations of (i)
this Section 8.4 shall not apply to (i) any fraud or intentional
misrepresentation, (ii) any intentional breach under this Agreement, (iii) any
misrepresentation or breach under Sections 6.2.1, 6.2.2, 6.2.3 or 3.16 and (iv)
any liabilities of Partners or Seller other than Assumed Liabilities.
Additionally, Seller shall not be liable for Indemnifiable Damages in excess of
the Purchase Price, nor shall a Partner be liable in excess of the value of the
Group 1 stock received by such Partner.

9. Provisions Respecting Employees.

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<PAGE> 20

comply with the continuation of health care coverage of COBRA and Sections 601
through 608 of ERISA which failure occurred with respect to any current or prior
employee of Seller or any qualified beneficiary of such employee (as defined in
COBRA) on or prior to the date of Closing or as otherwise required as a result
of any transactions or matters contemplated by this agreement.

10. General Provisions.

<TABLE>
<S> <C>
If to Seller: Rockwall Ford-Mercury, Ltd.
c/o Gene Messer Ford, Inc.
600 W. 19th Street
Lubbock, Texas 79416
Attn: Greg Wessels

with a copy to: Stephen T. Krier, Esq.
2112 Indiana
Lubbock, Texas 79410-1499

If to Purchaser: Delaware Acquisitions - F, L.L.C.
c/o Robert E. Howard II
P.O. Box 14508
Oklahoma City, Oklahoma, 73113-0508

with a copy to: Randall K. Calvert, Esq.
6520 N. Western, Suite 100
Oklahoma City, Oklahoma 73116
</TABLE>

or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.

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<PAGE> 21

10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.

10.9. Amendment. This Agreement may not be amended by any oral agreement or
understanding but only by an amendment in writing executed by the parties
hereto.

10.13. Headings. The section headings contained in this Agreement are for
convenience only and shall not affect in any way the meaning or interpretation
of the Agreement.

[The remainder of this page is intentionally blank.]

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<PAGE> 22

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.

"PURCHASER"
Delaware Acquisitions - F, L.L.C.,
a Delaware limited liability company

By: /s/ ROBERT E. HOWARD II
---------------------------------------------------
Robert E. Howard II, Manager

"SELLER"
Rockwall Ford-Mercury, Ltd.,
a Texas limited partnership

By: /s/ GREGORY W. WESSELS
---------------------------------------------------
Gregory W. Wessels, Manager
GMRFM L.C., a Texas limited liability company
General Partner

<PAGE> 23

ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED
-----------------------------------------

<TABLE>
<S> <C>
Class I Cash and Cash Equivalents $

Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $

Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $

Class IV All Section 197 intangibles, except those in the
nature of goodwill $

Class V Goodwill $

Total of Classes, I, II, III, IV, and V $
</TABLE>

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

1. Date of Sale: , 1999.
----------

2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:

Yes No
---------- ---------

3. Were any of the following purchased or entered into:

License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?

Yes No
---------- ---------

If "yes," specify (a) type of agreement and (b) maximum amount of
consideration (not including interest) paid or to be paid under agreement.
Attach separate sheet detailing the above.

Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.

PURCHASER: SELLER:
Delaware Acquisitions-F, L.L.C. Rockwall Ford-Mercury, Ltd.
Taxpayer ID No. Taxpayer ID No.
-------------------- ----------

BY: BY:
--------------------------------- ----------------------------

<PAGE> 24

ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT

<PAGE> 25

ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - WESSELS

<PAGE> 26

ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - MESSER

<PAGE> 27

ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY

<PAGE> 28

ASSET PURCHASE AGREEMENT
EXHIBIT "E"
BILL OF SALE

<PAGE> 29

ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST

<PAGE> 30

ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST

<PAGE> 31

ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES

<PAGE> 32

ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS

<PAGE> 33

ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES

<PAGE> 34

ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS

<PAGE> 1
EXHIBIT 10.7

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Gene Messer Imports, Inc., a Texas corporation, d/b/a/ Gene Messer
Mitsubishi, Volkswagen, and Kia ("Seller"), and Lubbock Automotive - M, Inc., a
Delaware corporation ("Purchaser").

EXPLANATORY STATEMENT

WHEREAS, Seller is presently a party to a Sales and Service Agreement with
Volkswagen of America, Inc. ("Volkswagen"), Mitsubishi Motors Sales of America,
Inc. ("Mitsubishi"), and Kia Motors Sales of America, Inc. ("Kia") (collectively
or individually "Manufacturer"); which provide for the sale and service of
Volkswagen, Mitsubishi, and Kia vehicles ("Dealership") at 4025 W. Loop 289,
Lubbock, Texas 79407 (the "Dealership Location"); and

WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Volkswagen,
Mitsubishi, and Kia dealer at the Dealership Location.

WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;

WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;

WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;

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<PAGE> 2

2.1.Purchase Price. The purchase price for the Assets to be sold and
transferred by Seller to Purchaser shall be the total of the items listed in
Sections 2.1.1. through 2.1.10. (collectively, the "Purchase Price"):

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<PAGE> 3

card", "sale card," or comparable documentation) to Purchaser so
that Purchaser may subsequently sell, transfer and register such
vehicles as new vehicles. Seller shall disclose all damage as well
as any repairs made to any vehicle. Any vehicle previously
damaged, even if repaired, if the cost of repairing such damage
exceeds or has exceeded Five Hundred Dollars ($500), shall be
considered used cars and sold pursuant to the terms of section
2.1.2, below. Installed accessories shall be purchased at actual
dealer cost, except Purchaser shall not pay for rust-proofing,
undercoating, scotch-guarding, non-Manufacturer alarm systems,
interrupt systems, theft prevention devices and similar dealer
additions. A list of new vehicles together with the information to
calculate the Purchase Price, will be provided to Purchaser at
least Five (5) days prior to the Closing Date.

2.1.2. Purchaser will purchase all of the used vehicle inventory of
Seller, which are less than Seventy Five (75) days old, at the
book value of the vehicles, as reflected on Seller's books, less
the "Pack" added to the book value of the vehicles by Seller.
Purchaser will purchase all of the used vehicle inventory of
Seller, which is more than Seventy Five (75) days old, at the
current wholesale market value of the vehicles as determined by
the Purchaser, provided that Seller may retain any of said used
vehicles if Seller is not satisfied with the valuation
established. Seller shall deliver titles to all used vehicles
within One Hundred Twenty (120) days after the Closing Date.
Seller guarantees the delivery of the used car titles to
Purchaser. If Seller is unable to deliver the title to a vehicle
within One Hundred Twenty (120) days after the Closing Date,
Seller will repurchase the vehicle.

2.1.3. Purchaser agrees to purchase Seller's actual verifiable inventory
of new, unused, undamaged and non-obsolete Manufacturer's parts
and accessories. Purchase Price will be those dealer prices in
accordance with the Manufacturer's Price Schedules in effect on
the Closing Date. Seller shall assign to Purchaser the termination
rights provided by each Manufacturer's Sales and Service
Agreement, to the extent same exist or are assignable. In the
alternative, Seller agrees to allow Purchaser to exercise any and
all Seller's termination rights in Seller's name.

2.1.4. Purchaser agrees to purchase Seller's actual verifiable inventory
of after-market parts and accessories. The Purchase Price will be
the dealer's actual cost.

2.1.6. Purchaser shall purchase all oil and grease in Seller's possession
at Seller's cost.

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<PAGE> 4

List shall be deemed to include all fixed assets located at the
Dealership Location, even if omitted from SCHEDULE 2.1, unless
said asset is specifically listed on SCHEDULE 2.2 ("Retained
Assets") attached hereto, in which case the asset shall be
retained by Seller. Seller agrees to provide Purchaser with
SCHEDULES 2.1 and SCHEDULE 2.2 for attachment hereto, on or before
March 15, 1999.

2.1.8. Seller will transfer to Purchaser all parts catalogues, service
manuals, films, videos, instructional materials, vehicle
literature, supplies and other assets used in the sales or service
of Volkswagen, Mitsubishi, and Kia vehicles and used vehicles
("Other Assets") (specifically excluding Retained Assets") whether
or not such assets are considered fixed assets or are reported as
such on Seller's books and records or listed on the attached
SCHEDULE 2.1. Purchaser shall purchase the Other Assets of Seller
for Five Thousand and no/100 Dollars ($5,000.00).

2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations for
the computer, telephone, copier, and manufacturer required leased
equipment. In addition Purchaser will assume other leases not
otherwise described above with a total monthly obligation not to
exceed One Thousand and no/100 Dollars ($1,000.00) per month, in
the aggregate. A copy of the lease agreements and contract listed
on SCHEDULE 2.4, together with any amendments thereto, shall be
delivered to Purchaser as soon as practical after execution of
this Agreement. Seller agrees to provide Purchaser with SCHEDULE
2.4 for attachment hereto, on or before March 15, 1999.

2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's telephone
numbers. Purchaser shall receive all sales and service files and
parts records, customer lists, computer files containing sales and
service files, parts records and customer lists and all other
information and documents which are necessary and/or which might
be useful in the furtherance of the dealership business (Seller
shall retain its employee personnel files, general ledgers,
sub-ledgers, canceled checks, journals, vouchers, tax returns and
other accounting ledgers.). Purchaser agrees to pay Seller for the
goodwill, the sum of Two Million Five Hundred Twenty Thousand Six
Hundred Ninety Four and No/100 Dollars ($2,520,694.00).

2.2. Liens and Encumbrances. All Assets will be transferred free of any
liens or encumbrances, except for the obligations which Purchaser agrees to
assume, as listed on the attached Schedule 2.3 ("Assumed Liabilities").

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<PAGE> 5

3. Supplemental Agreements.

3.1. Maintenance of Business Prior to Closing. Seller agrees that prior to
Closing it shall operate its business in a manner consistent with prior business
practice. In connection therewith, the parties agree that Seller may dealer
trade vehicles for similar models, but Seller shall not liquidate or otherwise
dispose of any of its new vehicles other than in the ordinary course of business
to retail buyers. Seller agrees to maintain its advertising expenditures and
activities commensurate with prior business practices. Seller shall not
advertise a "Going Out of Business" sale. Seller agrees to pay (or contest, if
disputed) Seller's trade payables, including Seller's telephone and yellow pages
bills, through the Closing Date. All revenue and expenses prior to Closing shall
be the benefit and burden of Seller.

3.2. Seller's Name. Seller shall assign all rights to the name "Gene Messer
Mitsubishi, Volkswagen, and Kia" to Purchaser. Purchaser may not assign this
Agreement or any right hereunder to any unrelated third party. Seller values its
name and reputation in the community, has investigated Group 1 and its
management and believes that Group 1 and Purchaser will preserve and carry
forward the name and reputation that Seller, and its primary owner, Gene Messer,
whose name is used in the business, has established in its community for many
years. Purchaser and Group 1 agree that it will not assign this Agreement or any
rights hereunder to any unrelated third party, and in the event that
substantially all of the assets of the Dealership or the equity ownership of the
Dealership are acquired by any party other than Group 1 or an entity controlled
by Group 1, the name "Messer" shall immediately cease to be used in the
promotion and name of the dealership so acquired by the third party. In the
event there is an adverse change in the operations to the extent that the
integrity of the name Gene Messer is impacted, Seller shall have the opportunity
to request the Board of Directors of Group 1 ("Board"), that the name "Messer"
be removed from the dealership within a reasonable period of time. After due
consideration of the facts and circumstances of this request, the decision of
the Board will be final.

3.3. Prepaids. Seller shall retain all prepaid accounts, provided however,
that Seller and Purchaser may review the prepaid accounts and transfer any such
prepaid accounts as they determine mutually beneficial, at the amount agreed to
by them.

3.4. Liabilities. Purchaser is not assuming the floor plan liabilities of
Seller. As of the Closing Date, Seller and Purchaser shall obtain the complete
release and discharge of the floor plan liability secured by liens on vehicles
or other assets conveyed under this Agreement. Purchaser is not assuming any
other liabilities of Seller, except as otherwise provided herein.

3.5. Retail Orders. On the Closing Date, Seller shall turn over or assign
by proper and appropriate instruments to Purchaser all unfulfilled retail orders
and customer deposits attributable thereto, held by Seller as of the Closing
Date. Purchaser shall assume such retail orders and responsibility to the
customer for making future delivery of any vehicle covered by the orders.

3.6. Allocation of Purchase Price. Purchaser and Seller agree that the
purchase price is allocated for the purposes of Section 1060 of the Internal
Revenue Code 1986, as amended, in

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<PAGE> 6

accordance with the value set forth for each class of asset and for each
corporation, as listed on the attached EXHIBIT "A" ("Allocation of Purchase
Price"). The parties hereto agree that each of them will timely file with the
Internal Revenue Service Form 8594 and that all tax returns or other tax
information any party hereto files or cause to be filed with any governmental
agency including the Internal Revenue Service, will be prepared in a manner that
is consistent with this section.

3.7. Property Taxes. All real and personal property taxes on property owned
or leased by Seller, which are not covered by the VIT (as hereinafter defined),
for the current year shall be prorated to the Closing Date. If the amount of
property taxes for the current tax year has not been fixed by the Closing Date,
the proration of such taxes shall be based upon the preceding tax year's
assessment. Purchaser shall receive the prorated taxes and shall pay the full
tax amount when due. Purchaser shall collect and remit the "vehicle inventory
tax" under Section 23.122 of the Texas Property Tax Code ("VIT") on each vehicle
sold by Purchaser after the Closing Date through December 31, 1999. All such
remittances shall be applied to the 1999 VIT liability of the Dealership. If the
aggregate of all remittances is not sufficient to fully discharge Dealership's
liability, Seller shall be liable for the balance of tax owing.

3.8. Information Releases. Purchaser and the Seller will jointly prepare
and issue all releases of information relating to the sale. Subject to the prior
sentence, if inquiries are made by any person with respect to any transaction
contemplated by this Agreement, Seller and Purchaser will consult each other
prior to responding to such inquiries.

3.9. Business Records. Seller shall not copy or remove any of the records
described in Section 2.10 from the dealership premises prior to the Closing Date
and shall return any of such records previously removed. Seller agrees that such
information is extremely important to Purchaser and promises to retain such
information in strict confidence and will not disclose any such information to
Purchaser's competitors or other parties. Purchaser agrees that Purchaser will
retain such information for a period not less than seven (7) years after the
Closing Date and that Seller and Seller's representatives may have access to
review and copy such information during Purchaser's regular business hours if
such information is necessary for Seller's business purposes. Purchaser and its
representatives may have access to review and copy any records retained by
Seller during Seller's regular business hours if such information is necessary
in Purchaser's operation of the dealership business after Closing. Seller agrees
to remove all retained records from the Dealership Location with thirty (30)
days after the Closing Date. If Purchaser wishes to destroy any of the business
records transferred by Seller, within Seven (7) years of the Closing Date,
Purchaser shall notify Seller prior to such destruction, in order that Seller
may retain such records.

-6-
<PAGE> 7

-7-
<PAGE> 8

3.17. Right of First Refusal. If within Ten (10) years of the Closing Date,
Purchaser agrees to transfer the Sales and Service Agreement for Volkswagen,
Mitsubishi, and Kia ("Franchise") to an independent third party (an entity not
owned or controlled by Group 1), in a transaction that is not part of the
Manufacturer's channelling or alignment programs (e.g. "Project 2000"), any such
agreement shall be subject to the terms and provisions of this Section 3.17 and
Seller shall have the right of first refusal upon such assets transferred. If
Purchaser enters into an agreement to transfer the Franchise ("Transfer
Agreement") in a transaction which is subject to this right of first refusal,
then Purchaser shall deliver a copy of the Transfer Agreement together with the
financial and operating information provided to the prospective transferee, to
Seller ("Notice"). Seller will have thirty (30) days from the Notice date to
exercise Seller's right to assume the prospective transferee's position under
the Transfer Agreement. If Seller exercises the right of first refusal, Seller
must comply with all terms, conditions and covenants of the Transfer Agreement.
If Seller does not respond to the Notice within thirty (30) days it will be
deemed refused by Seller. If Seller does not exercise the right of first
refusal, then Purchaser may complete the transaction contemplated in the
Transfer Agreement, upon the terms and conditions contained therein. If
Purchaser does not close the transaction contemplated in the Transfer Agreement
within One Hundred Eighty (180) days, then Seller's right of first refusal on
such assets shall be reinstated.

4. Conditions to Sale.

4.1. Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser with respect to actions to be taken by Purchaser at or before the
Closing are subject to the satisfaction, or the written waiver by the Purchaser
of each of the following conditions:

4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for new Sales and Service Agreements for Volkswagen,
Mitsubishi, and Kia.

-8-
<PAGE> 9

4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.

4.1.6. Execution and delivery of a lease agreement in the form
attached hereto as Exhibit "B" for the Dealership Location
("Lease Agreement").

4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

4.1.11. The applicable waiting period under the HSR Act with respect to
the transactions contemplated by this Agreement shall have
expired or been terminated.

(a) Due incorporation and existence of Seller and the
corporate power of Seller to execute, deliver and perform
the Asset Purchase Agreement.

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<PAGE> 10

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Bill of Sale and Lease (as to the
Stockholders of Seller and entities controlled by them
which are party to the Lease).

(d) Absence of any violation of the charter or by-laws of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.

4.1.13. Closing of the transactions contemplated in the Related
Agreements.

4.2. Conditions Precedent to Obligations of Seller. The obligation of
Seller with respect to actions to be taken by Seller at or before the Closing
are subject to the satisfaction, or the written waiver by the Seller of each of
the following conditions:

4.2.2. Execution and delivery of the Lease Agreement and related lease
guaranty in the form attached hereto as Exhibit "D" ("Lease
Guaranty").

4.2.3. Execution and delivery of the Employment Agreements.

4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.

(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.

(b) Due authorization, execution and delivery of the Asset
Purchase Agreement, Lease, and related Lease Guaranty
agreement.

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<PAGE> 11

4.2.6. Closing of the transactions contemplated in the Related
Agreements.

5. Closing.

5.1. Time of Closing. Unless otherwise agreed to in writing by the parties,
Closing shall take place in Lubbock, Texas, on the first Monday following the
receipt of the approvals required in Section 4.1.1, 4.1.2, and 4.1.11., above,
and receipt of the approvals required in Section 4.1.1, 4.1.2 and 4.1.11 of each
of the Related Agreements ("Closing Date"). Provided however, that if the
Closing has not taken place by September 30, 1999, then Seller or Purchaser at
no further cost or expense as a result of the act of terminating, may terminate
this Agreement at any time by written notice to the other party.

5.2. Seller's Actions at Closing. At Closing, Seller shall deliver to
Purchaser at Seller's sole cost and expense, such bills of sales, endorsements,
assignments, and other good and sufficient instruments of conveyance and
transfer as provided for herein, and any other instruments in form and substance
acceptable to Purchaser as shall be necessary to vest effective in Purchaser all
right, title, and interest in and to the Assets, free and clear of all liens,
charges, encumbrances, pledges or claims of any nature (except as provided
herein), including without limitation, the following:

5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Bill of Sale").

5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.

5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.

5.2.5. A certificate of corporate existence in good standing for
Seller from the State of Texas dated within thirty (30) days of
the Closing Date.

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<PAGE> 12

5.2.7. Possession of the Assets.

5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.2.9. Executed Lease Agreement.

5.2.10. Executed Employment Agreements.

5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.

5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

5.3. Actions of Purchaser at Closing. At the Closing, Purchaser shall
deliver the following:

5.3.1. Payment for the Purchase Price of the Assets less the Earnest
Money, and release any claim to the Earnest Money ("Closing
Payment"), as follows:

(a) The number of shares of Group 1 Common Stock equal to (x) Seven
Hundred Fifty Thousand and no/100 Dollars ($750,000.00),
divided by (y) the average closing price of the Group 1 Common
Stock on the New York Stock Exchange for the Five (5)
consecutive trading days ended on the third trading day prior
to the Closing Date. The stock certificates representing the
Group 1 Common Stock shall be delivered to the Stockholders
within Five (5) business days after the Closing Date. No
fractional shares of Group 1 Common Stock will be issued, but
in lieu thereof, Seller shall receive cash for any fractional
shares.

(b) Immediately available funds to Seller in the amount of Purchase
Price less: (i) the Earnest Money, and (ii) Seven Hundred Fifty
Thousand and no/100 Dollars ($750,000.00), shall be delivered
(or wired) to Seller on the Closing Date.

5.3.3. A certificate executed by Purchaser's President certifying
that, as of the Closing Date, all of the representations and
warranties of Purchaser are true and correct in all respects
and that each and every covenant and agreement to be performed
by Purchaser prior to or as of the Closing Date pursuant to
this Agreement has been performed in all respects.

-12-
<PAGE> 13

5.3.4. A certificate of existence for Purchaser from the State of
Delaware.

5.3.5. Executed Lease Agreement and Lease Guaranty.

5.3.6. Executed Employment Agreements.

5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.

5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.

6.1. Purchaser. Purchaser represents and warrants to Seller as
follows:

6.1.1. Purchaser is a Delaware corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Purchaser has all requisite authority and power to
enter into this Agreement and performs its obligations herein.
The execution and delivery of this Agreement and the
consummation by Purchaser of the transactions contemplated
herein have been authorized by all requisite company actions on
the part of Purchaser.

6.1.3. Neither the execution or delivery of this Agreement by
Purchaser nor the consummation by Purchaser of the transactions
contemplated herein will (i) conflict with or result in a
breach of, the terms, conditions or provisions of, or
constitute a default under the Certificate of Incorporation,
bylaws, resolutions or consents of Purchaser, or any indenture,
mortgage, lease, agreement or other instrument to which
Purchaser is a party; or (ii) violate any law or regulation to
which Purchaser is or will be subject.

-13-
<PAGE> 14

6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.

6.2. Seller's. Seller represents and warrants to Purchaser as
follows:

-14-
<PAGE> 15

6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.

6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.

-15-
<PAGE> 16

7.2. Restrictions on Transfer of Group 1 Common Stock.

-16-
<PAGE> 17

Acquisition or (B) any interest in (including any option to buy
or sell) any of those shares of Group 1 Common Stock, in whole
or in part, and Group 1 will have no obligation to, and shall
not, treat any such attempted transfer as effective for any
purpose or (ii) engage in any transaction, whether or not with
respect to any shares of Group 1 Common Stock or any interest
therein, the intent or effect of which is to reduce the risk of
owning the shares of Group 1 Common Stock acquired pursuant to
this Agreement (including, for example, engaging in put, call,
short sale, straddle or similar market transactions).
Notwithstanding the foregoing, Wessels may: (i) pledge shares
of Group 1 Common Stock, provided that the pledgee of such
shares shall agree not to sell or otherwise dispose of any such
shares for the Restricted Period; (ii) transfer shares to
immediate family members or the estate of any such individual
(including without limitation, any transfer by Wessels to or
among any trust, custodial or other similar accounts or funds
that are for the benefit of his or her immediate family
members), provided that such person or entity shall agree not
to sell or otherwise dispose of any such shares for the
Restricted Period; and (iii) transfer shares by will or laws of
descent and distribution or otherwise by reason of such Wessels
death. The certificates evidencing the Group 1 Common Stock
delivered to Wessels pursuant to this Agreement will bear a
legend substantially in the form set forth below and containing
such other information as Group 1 may deem necessary or
appropriate:

-17-
<PAGE> 18

8. Indemnification.

-18-
<PAGE> 19

claim. This indemnification shall survive the consummation of the transactions
contemplated herein and shall remain in effect for a period of four (4) years
after the Closing Date. The remedies provided under this section shall be
cumulative and shall not preclude any party from asserting any other rights or
seeking any other remedies against any other party hereto. At the option of the
Indemnifying Party, sums due under this section may be offset against any sums
which may be due the Indemnified Party under Any Other Agreement between them.

9. Provisions Respecting Employees.

-19-
<PAGE> 20

claim, appeal, demand, assessment, or judgment) imposed upon, incurred by, or
assessed against, Purchaser and any of its employees arising by reason of or
relating to any failure to comply with the continuation of health care coverage
of COBRA and Sections 601 through 608 of ERISA which failure occurred with
respect to any current or prior employee of Seller or any qualified beneficiary
of such employee (as defined in COBRA) on or prior to the date of Closing or as
otherwise required as a result of any transactions or matters contemplated by
this agreement.

10. General Provisions.

If to Seller: Gene Messer Imports, Inc.
c/o Gene Messer Ford, Inc.
600 W. 19th Street
Lubbock, Texas 79416
Attn: Greg Wessels

with a copy to: Stephen T. Krier, Esq.
2112 Indiana
Lubbock, Texas 79410-1499

If to Purchaser: Lubbock Automotive - M, Inc.
c/o Robert E. Howard II
P.O. Box 14508
Oklahoma City, Oklahoma, 73113-0508

with a copy to: Randall K. Calvert, Esq.
6520 N. Western, Suite 100
Oklahoma City, Oklahoma 73116

or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.

-20-
<PAGE> 21

10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.

10.9. Amendment. This Agreement may not be amended by any oral agreement or
understanding but only by an amendment in writing executed by the parties
hereto.

10.13. Headings. The section headings contained in this Agreement are for
convenience only and shall not affect in any way the meaning or interpretation
of the Agreement.

-21-
<PAGE> 22

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.

"PURCHASER"
Lubbock Automotive - M, Inc.,
a Delaware corporation

By: /s/ ROBERT E. HOWARD
----------------------------------------
Robert E. Howard, President

"SELLER"
Gene Messer Imports, Inc., a Texas corporation

By: /s/ GENE MESSER
----------------------------------------
Gene Messer, President

<PAGE> 23

ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED

<TABLE>
<S> <C>
Class I Cash and Cash Equivalents $

Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $

Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $

Class IV All Section 197 intangibles, except those in the
nature of goodwill $

Class V Goodwill $

Total of Classes, I, II, III, IV, and V $
</TABLE>

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

1. Date of Sale: , 1999.
------------
2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:

Yes No
---------- ---------
3. Were any of the following purchased or entered into:

License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?

Yes No
---------- -----------
If "yes," specify (a) type of agreement and (b) maximum amount of
consideration (not including interest) paid or to be paid under agreement.
Attach separate sheet detailing the above.

Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.

PURCHASER: SELLER:
Lubbock Automotive-M, Inc. Gene Messer Imports, Inc.
Taxpayer ID No. Taxpayer ID No. 75-2267530
--------------------

BY: BY:
------------------------------- -------------------------------

<PAGE> 24

ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT

<PAGE> 25

ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - WESSELS

<PAGE> 26

ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - MESSER

<PAGE> 27

ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY

<PAGE> 28

ASSET PURCHASE AGREEMENT
EXHIBIT "E"
BILL OF SALE

<PAGE> 29

ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST

<PAGE> 30

ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST

<PAGE> 31

ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES

<PAGE> 32

ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS

<PAGE> 33

ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES

<PAGE> 34

ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 72,029
<SECURITIES> 0
<RECEIVABLES> 22,022
<ALLOWANCES> 0
<INVENTORY> 262,940
<CURRENT-ASSETS> 375,494
<PP&E> 26,313
<DEPRECIATION> 0
<TOTAL-ASSETS> 544,796
<CURRENT-LIABILITIES> 238,408
<BONDS> 98,849
0
0
<COMMON> 205
<OTHER-SE> 164,838
<TOTAL-LIABILITY-AND-EQUITY> 544,796
<SALES> 473,671
<TOTAL-REVENUES> 489,351
<CGS> 413,157
<TOTAL-COSTS> 413,157
<OTHER-EXPENSES> 60,369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,633
<INCOME-PRETAX> 10,228
<INCOME-TAX> 4,071
<INCOME-CONTINUING> 6,157
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,157
<EPS-PRIMARY> .33
<EPS-DILUTED> .31

</TABLE>