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EXHIBIT 1.4
PRICING AGREEMENT
Xxxxxxx, Xxxxx & Co.,
Chase Securities Inc.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
March 2, 1999
Ladies and Gentlemen:
Group 1 Automotive, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated March 2, 1999 (the "Underwriting Agreement"), to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities"). The Designated Securities will be unconditionally guaranteed by
each of the subsidiaries of the Company named in Schedule II hereto (such
guarantors, the "Subsidiary Guarantors" and such guarantees, the "Subsidiary
Guarantees"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Securities pursuant to
Section 12 of the Underwriting Agreement and the address of the Representatives
referred to in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, the Subsidiary Guarantors agree to
issue their Subsidiary Guarantees and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in
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Schedule II hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
Group 1 Automotive, Inc.
By /s/ X.X. Xxxxxxxxxxxxx, Xx.
-------------------------------------
X.X. Xxxxxxxxxxxxx, Xx.
Chairman, President and
Chief Executive Officer
Southwest Toyota, Inc.
SMC Luxury Cars, Inc.
XxXxxx Automotive Group, Inc.
Courtesy Nissan, Inc.
Group 1 Ford, Inc.
XxXxxxxx Dodge, Inc.
Xxxxx Automotive Group, Inc.
Xxxx Xxxxx Automotive-H, Inc.
Xxxx Xxxxx Automotive-N, Inc.
Xxxx Xxxxx Autoplaza, Inc.
Xxxx Xxxxx Autoplex, Inc.
Xxxx Xxxxx Autoplex Buick, Inc.
Xxxx Xxxxx Autoplex Dodge, Inc.
Xxxx Xxxxx Autoplex-German Imports, Inc.
Xxxx Xxxxx Autoplex-V, Inc.
Xxxx Xxxxx L/M, Inc.
Xxxx Xxxxx GM, Inc.
Round Rock Nissan, Inc.
Xxxxx, Liu & Xxxxxx, Inc.
Xxxxx, Liu & Xxxx, Inc.
Town North Imports, Inc.
Town North Nissan, Inc.
Town North Suzuki, Inc.
Xxx Xxxxxx Automotive-A, Inc.
Xxx Xxxxxx Automotive-H, Inc.
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Xxx Xxxxxx Chevrolet, Inc.
Xxx Xxxxxx Dodge, Inc.
Xxx Xxxxxx Motors, Inc.
Xxx Xxxxxx Nissan, Inc.
Xxxxxx Automotive Group, Inc.
Xxxxxx Pontiac-GMC, Inc.
Foyt Motors, Inc.
Kingwood Motors-H, Inc.
Xxxxx Ford, Inc.
Courtesy Ford, Inc.
Perimeter Ford, Inc.
Flamingo Ford, Inc.
X. Xxxxxxx Management Group, Inc.
MMK Interests, Inc.
Highland Autoplex, Inc.
Xxxxxxx Texas Management, Inc.
Casa Chevrolet Inc.
Casa Chrysler Plymouth Jeep Inc.
Xxxxx Automotive Group, Inc.
Xxxx Chevrolet Co.
Xxxx Auto Group, Inc.
Xxx Xxxxxx Automotive-East, Inc.
GPI Atlanta, Inc.
Xxxx Xxxxx Autoplex-A, Inc.
Xxxx Xxxxx Motors, Inc.
Xxxx Xxxxx Imports, Inc.
Sunshine Buick Pontiac GMC Truck, Inc.
By /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Lubbock Automotive-M, Inc.
Lubbock Auto Group, Inc.
Group 1 Realty, Inc.
By /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
President
Prestige Chrysler Plymouth Northwest, Ltd.
Prestige Chrysler Plymouth South, Ltd.
Xxxxxxx Chrysler Plymouth Jeep Eagle, Ltd.
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By: MMK Interests, Inc.
General Partner
By /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Vice President
Prestige Xxxxxxx, Inc.
Xxxxxxx Holdings, Inc.
Group 1 Holdings-T, Inc.
Group 1 Holdings-GM, Inc.
By /s/ Xxxxxx X. Xxxxxx XX
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Xxxxxx X. Xxxxxx XX
President
Xxxxxxx Xxxx, Ltd.
By: Xxxxxxx Texas
Management, Inc.
By /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Lubbock Motors-F, Ltd.
Lubbock Motors-T, Ltd.
Rockwall Automotive-F, Ltd.
Amarillo Motors-C, Ltd.
Amarillo Motors-J, Ltd.
Amarillo Motors-F, Ltd.
By: Lubbock Motors, Inc.
By /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
President
Chapparal Dodge, Ltd.
Colonial Chrysler-Plymouth, Ltd.
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By: Xxxx Auto Group, Inc.
By /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Delaware Acquisition-CC, L.L.C.
Delaware Acquisition-F, L.L.C.
Delaware Acquisition-T, L.L.C.
Delaware Acquisition-GM, L.L.C.
By /s/ Xxxxxx X. Xxxxxx XX
----------------------------------------
Xxxxxx X. Xxxxxx XX
Manager
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By: /s/ Xxxxxxx, Sachs & Co.
------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Purchased
----------
UNDERWRITER
-----------
Xxxxxxx, Sachs & Co. ................................................... $ 60,000,000
Chase Securities Inc. .................................................. $ 20,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ..................... $ 20,000,000
Total................................................. $100,000,000
============
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SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
10 7/8% Senior Subordinated Notes due March 1, 2009
AGGREGATE PRINCIPAL AMOUNT:
$100,000,000
PRICE TO PUBLIC:
97.781% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
94.781% of the principal amount of the Designated Securities, plus
accrued interest, if any from March 5, 1999
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.
TIME OF DELIVERY:
9:30 a.m. (New York City time), Xxxxx 0, 0000
XXXXXXXXX:
Indenture to be dated as of March 5, 1999, among, the Company, the
Subsidiary Guarantors and IBJ Whitehall Bank & Trust Company, as
Trustee as supplemented by a supplemental indenture relating to the
Designated Securities
MATURITY:
March 1, 2009
INTEREST RATE:
10.875%
INTEREST PAYMENT DATES:
March 1 and September 1, commencing September 1, 1999
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REDEMPTION PROVISIONS:
The Designated Securities shall be subject to redemption as described
in the Prospectus as supplemented for the Designated Securities.
SUBSIDIARY GUARANTORS:
Southwest Toyota, Inc.
SMC Luxury Cars, Inc.
XxXxxx Automotive Group, Inc.
Courtesy Nissan, Inc.
Group 1 Ford, Inc.
XxXxxxxx Dodge, Inc.
Xxxxx Automotive Group, Inc.
Xxxx Xxxxx Automotive-H, Inc.
Xxxx Xxxxx Automotive-N, Inc.
Xxxx Xxxxx Autoplaza, Inc.
Xxxx Xxxxx Autoplex, Inc.
Xxxx Xxxxx Autoplex Buick, Inc.
Xxxx Xxxxx Autoplex Dodge, Inc.
Xxxx Xxxxx Autoplex-German Imports, Inc.
Xxxx Xxxxx Autoplex-V, Inc.
Xxxx Xxxxx L/M, Inc.
Xxxx Xxxxx GM, Inc.
Round Rock Nissan, Inc.
Xxxxx, Xxx & Xxxxxx, Inc.
Xxxxx, Xxx & Xxxx, Inc.
Town North Imports, Inc.
Town North Nissan, Inc.
Town North Suzuki, Inc.
Xxx Xxxxxx Automotive-A, Inc.
Xxx Xxxxxx Automotive-H, Inc.
Xxx Xxxxxx Chevrolet, Inc.
Xxx Xxxxxx Dodge, Inc.
Xxx Xxxxxx Motors, Inc.
Xxx Xxxxxx Nissan, Inc.
Xxxxxx Automotive Group, Inc.
Xxxxxx Pontiac-GMC, Inc.
Foyt Motors, Inc.
Kingwood Motors-H, Inc.
Xxxxx Ford, Inc.
Courtesy Ford, Inc.
Perimeter Ford, Inc.
Flamingo Ford, Inc.
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X. Xxxxxxx Management Group, Inc.
MMK Interests, Inc.
Highland Autoplex, Inc.
Xxxxxxx Texas Management, Inc.
Casa Chevrolet Inc.
Casa Chrysler Plymouth Jeep Inc.
Xxxxx Automotive Group, Inc.
Xxxx Chevrolet Co.
Xxxx Auto Group, Inc.
Xxx Xxxxxx Automotive-East, Inc.
GPI Atlanta, Inc.
Xxxx Xxxxx Autoplex-A, Inc.
Xxxx Xxxxx Motors, Inc.
Xxxx Xxxxx Imports, Inc.
Sunshine Buick Pontiac GMC Truck, Inc.
Lubbock Automotive-M, Inc.
Lubbock Auto Group, Inc.
Group 1 Realty, Inc.
Prestige Chrysler Plymouth Northwest, Ltd.
Prestige Chrysler Plymouth South, Ltd.
Xxxxxxx Chrysler Plymouth Jeep Eagle, Ltd.
Prestige Xxxxxxx, Inc.
Xxxxxxx Holdings, Inc.
Group 1 Holdings-T, Inc.
Group 1 Holdings-GM, Inc.
Xxxxxxx Xxxx, Ltd.
Lubbock Motors-F, Ltd.
Lubbock Motors-T, Ltd.
Rockwall Automotive-F, Ltd.
Amarillo Motors-C, Ltd.
Amarillo Motors-J, Ltd.
Amarillo Motors-F, Ltd.
Chapparal Dodge, Ltd.
Colonial Chrysler-Plymouth, Ltd.
Delaware Acquisition-CC, L.L.C.
Delaware Acquisition-F, L.L.C.
Delaware Acquisition-T, L.L.C.
Delaware Acquisition-GM, L.L.C.
DEFEASANCE PROVISIONS:
The Designated Securities shall be subject to defeasance and covenant
defeasance.
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CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Xxxxxx & Xxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
ADDITIONAL CLOSING CONDITIONS:
None
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Xxxxxxx, Xxxxx & Co.
Chase Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Address for Notices, etc.:
c/o Goldman, Sachs & Co.
0 Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Registration Department
OTHER TERMS :
1. The Company hereby confirms its engagement of Xxxxxxx, Xxxxx & Co.
as, and Xxxxxxx, Sachs & Co. hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the meaning of
Section 2(o) of Rule 2720 of the Rules of Conduct of the National Association
of Securities Dealers, Inc. with respect to the offering and sale of the
Designated Securities. Xxxxxxx, Xxxxx & Co., in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the "QIU".
As compensation for the services of the QIU hereunder, the Company agrees to
pay the QIU $10,000 at the Time of Delivery.
2. (a) The Company and the Subsidiary Guarantors, jointly and
severally, will indemnify and hold harmless Xxxxxxx, Sachs & Co., in its
capacity as QIU, against any losses, claims, damages or liabilities, joint or
several, to which the QIU may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or
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arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the QIU for any legal or
other expenses reasonably incurred by the QIU in connection with investigating
or defending any such action or claim as such expenses are incurred; provided,
however, that neither the Company nor any Subsidiary Guarantor shall be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the QIU in its capacity as QIU expressly for use therein.
(b) Promptly after receipt by the QIU under subsection (a) above of
notice of the commencement of any action, the QIU shall, if a claim in respect
thereof is to be made against the Company and the Subsidiary Guarantors under
such subsection, notify the Company and the Subsidiary Guarantors in writing of
the commencement thereof; but the omission so to notify the Company and the
Subsidiary Guarantors shall not relieve them from any liability which they may
have to the QIU otherwise than under such subsection. In case any such action
shall be brought against the QIU and it shall notify the Company and the
Subsidiary Guarantors of the commencement thereof, the Company and the
Subsidiary Guarantors shall be entitled to participate therein and, to the
extent that they shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
the QIU (who shall not, except with the consent of the QIU, be counsel to the
Company and the Subsidiary Guarantors), and, after notice from the indemnifying
party to the QIU of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the QIU under such subsection for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by the QIU, in connection with the defense thereof other
than reasonable costs of investigation. The Company and the Subsidiary
Guarantors shall not, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the QIU
is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of the
QIU from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the QIU.
(c) If the indemnification provided for in this Section 2 is
unavailable to or insufficient to hold harmless Xxxxxxx, Xxxxx & Co., in its
capacity as QIU, under subsection (a) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein,
then the Company and the Subsidiary Guarantors, jointly and severally, shall
contribute to the amount paid or payable by the QIU as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Subsidiary Guarantors on the one hand and the QIU on the other
from the offering of the Designated Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the QIU failed to give the notice required under subsection (b)
above, then the Company and the Subsidiary Guarantors shall contribute to such
amount paid or payable by the QIU in such
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proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Subsidiary
Guarantors on the one hand and the QIU on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and the QIU on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company, as set forth in the table
on the cover page of the Prospectus as supplemented for the Designated
Securities, bear to the fee payable to the QIU pursuant to Section 1 hereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement or a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the QIU on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Subsidiary
Guarantors and the QIU agree that it would not be just and equitable if
contributions pursuant to this subsection (c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (c). The
amount paid or payable by the QIU as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (c) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) The obligations of the Company and the Subsidiary Guarantors under
this Section 2 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the QIU within the meaning of the Act.
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