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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is entered into between Group 1
Automotive, Inc. having offices at 950 Echo Lane, Suite 100, Houston, Texas
77024 ("Employer"), and B. B Hollingsworth, Jr., an individual currently
residing at 5763 Indian Circle, Houston, Texas 77057 ("Employee"), to be
effective as of March 1, 2002.

         For and in consideration of the mutual promises, covenants, and
obligations contained herein, Employer and Employee agree as follows:

1.       EMPLOYMENT AND DUTIES:

         1.1. Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, beginning March 1, 2002 and continuing throughout the Term
(as defined below) of this Agreement, subject to the terms and conditions of
this Agreement.

         1.2. Employee shall serve as Chairman, President and Chief Executive
Officer of Employer. Employee agrees to serve in the assigned position and to
perform diligently and to the best of Employee's abilities the duties and
services appertaining to such position as determined by Employer, as well as
such additional or different duties and services appropriate to such position
which Employee from time to time may be reasonably directed to perform by
Employer. Employee shall at all times comply with and be subject to such
policies and procedures as Employer may establish from time to time.

         1.3. Employee shall, during the period of Employee's employment by
Employer, devote Employee's full business time, energy, and best efforts to the
business and affairs of Employer. Employee may not engage, directly or
indirectly, in any other business, investment, or activity that interferes with
Employee's performance of Employee's duties hereunder, is contrary to the
interests of Employer or any of its subsidiaries or affiliates, or requires any
significant portion of Employee's business time; provided, however, that
Employee may engage in passive personal investments that do not conflict with
the business and affairs of the Employer or any of its subsidiaries or
affiliates or interfere with Employee's performance of his or her duties
hereunder.

         1.4. Employee acknowledges and agrees that Employee owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of Employer or any of its subsidiaries or affiliates and to do no act
which would injure the business, interests, or reputation of Employer or any of
its subsidiaries or affiliates. In keeping with these duties, Employee shall
make full disclosure to Employer of all business opportunities pertaining to
Employer's business and shall not appropriate for Employee's own benefit
business opportunities concerning the subject matter of the fiduciary
relationship.

         1.5. It is agreed that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect Employer, or any of
its affiliates, involves a possible conflict of interest. In keeping with
Employee's fiduciary duties to Employer, Employee agrees that Employee shall not
knowingly become involved in a conflict of interest with Employer, or its
affiliates, or upon discovery thereof, allow such a conflict to continue.
Moreover, Employee agrees that Employee shall disclose to Employer's General
Counsel (who

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shall be Employer's outside General Counsel unless Employer has employed an
inside General Counsel) any facts which might involve such a conflict of
interest that has not been approved by Employer's President. Employer and
Employee recognize that it is impossible to provide an exhaustive list of
actions or interests which constitute a "conflict of interest". Moreover,
Employer and Employee recognize there are many borderline situations. In some
instances, full disclosure of facts by Employee to Employer's General Counsel
may be all that is necessary to enable Employer or its subsidiaries or
affiliates to protect its interests. In others, if no improper motivation
appears to exist and the interests of Employer or its subsidiaries or affiliates
have not suffered, prompt elimination of the outside interest will suffice. In
still others, it may be necessary for Employer to terminate the employment
relationship. Employee agrees that Employer's determination as to whether a
conflict of interest exists shall be conclusive. Employer reserves the right to
take such action as, in its judgment, will end the conflict.

2.       COMPENSATION AND BENEFITS:

         2.1. Employee's initial base salary under this Agreement shall be
$600,000 per annum and shall be paid in semi-monthly installments in accordance
with Employer's standard payroll practice. Employee's base salary may be
increased from time to time by Employer and, after any such change, Employee's
new level of base salary shall be Employee's base salary for purposes of this
Agreement until the effective date of any subsequent change.

         2.2 Employee's participation in bonus plans shall be governed by the
incentive compensation plans adopted by the Compensation Committee of the Board
of Directors of Employer in which Employee is a participant.

         2.3. If Employee is granted stock options, Employee will enter into a
separate written stock option agreement pursuant to which Employee shall be
granted the option to acquire common stock of Employer subject to the terms and
conditions of Employer's 1996 Stock Incentive Plan, or any successor plan, and
the stock option agreement entered into thereunder. The number of shares,
exercise price per share and other terms of the options shall be as specified in
such other written agreement, unless modified specifically herein.

         2.4. While employed by Employer, Employee shall be allowed to
participate, on the same basis generally as other employees of Employer, in all
general employee benefit plans and programs, including improvements or
modifications of the same, which on the effective date or thereafter are made
available by Employer to all or substantially all of Employer's employees. Such
benefits, plans, and programs may include, without limitation, medical, health,
and dental care, life insurance, disability protection, and pension plans.
Employer will furnish Employee three "demonstrator vehicles" of Employee's
choice. Nothing in this Agreement is to be construed or interpreted to provide
greater rights, participation, coverage, or benefits under such benefit plans or
programs than provided to similarly situated employees pursuant to the terms and
conditions of such benefit plans and programs. In addition, Employer may furnish
to Employee benefit plans and programs that are not generally available to other
employees, including, without limitation, deferred compensation, long-term
disability, split-dollar life insurance, stock options and incentive
compensation plans.

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         2.5. Employer shall not by reason of this Article 2 be obligated to
institute, maintain, or refrain from changing, amending, or discontinuing, any
such incentive compensation or employee benefit program or plan, so long as such
actions are similarly applicable to covered employees generally. Moreover,
unless specifically provided for in a written plan document adopted by the Board
of Directors or the Compensation Committee of Employer, none of the benefits or
arrangements described in this Article 2 shall be secured or funded in any way,
and each shall instead constitute an unfunded and unsecured promise to pay money
in the future exclusively from the general assets of Employer and its
subsidiaries and affiliates.

         2.6. Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.

3.       TERM OF THIS AGREEMENT, EFFECT OF EXPIRATION OF TERM, AND TERMINATION
         PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION:

         3.1. The term of this Agreement shall be from March 1, 2002 through
November 2, 2005. Should Employee remain employed by Employer beyond the
expiration of the Term, such employment shall convert to a month-to-month
relationship terminable at any time by either Employer or Employee for any
reason whatsoever, with or without cause, upon thirty days notice. Upon such
termination of the continued at-will employment relationship by either Employer
or Employee for any reason whatsoever, all future compensation to which Employee
is entitled and all future benefits for which Employee is eligible shall cease
and terminate. Employee shall be entitled to pro rata salary through the date of
such termination, but Employee shall not be entitled to any bonus with respect
to the operations of the Employer and its subsidiaries and affiliates during the
calendar year in which Employee's employment with Employer is terminated.

         3.2. Notwithstanding any other provisions of this Agreement, Employer
shall have the right to terminate Employee's employment under this Agreement at
any time for any of the following reasons:

         (i)      For "cause" upon the determination by Employer's Board of
                  Directors that "cause" exists for the termination of the
                  employment relationship. As used in this Section 3.2(i), the
                  term "cause" shall mean (a) Employee has engaged in gross
                  negligence, gross incompetence or willful misconduct in the
                  performance of, or Employee's willful refusal without proper
                  reason to perform, the duties and services required of
                  Employee pursuant to this Agreement; (b) Employee has been
                  convicted of a felony; or (c) Employee's material breach of
                  any material provision of this Agreement or corporate code or
                  policy. It is expressly acknowledged and agreed that the
                  decision as to whether "cause" exists for termination of the
                  employment relationship by Employer is delegated to Employer's
                  Board of Directors for determination. Employee, if he so
                  requests, after reasonable notice of such Board of Directors
                  meeting, shall be entitled to be heard before the Board of
                  Directors;

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         (ii)     for any other reason whatsoever, including termination without
                  cause, in the sole discretion of Employer's Board of
                  Directors;

         (iii)    upon Employee's death; or

         (iv)     upon Employee's becoming incapacitated by accident, sickness,
                  or other circumstance which in the reasonable opinion of a
                  qualified doctor approved by Employer's Board of Directors
                  renders him mentally or physically incapable of performing the
                  duties and services required of Employee, and which will
                  continue in the reasonable opinion of such doctor for a period
                  of not less than 180 days.

The termination of Employee's employment shall constitute a "Termination for
Cause" if made pursuant to Section 3.2(i); the effect of such termination is
specified in Section 3.4. The termination of Employee's employment shall
constitute an "Involuntary Termination" if made pursuant to Section 3.2(ii); the
effect of such termination is specified in Section 3.5. The effect of the
employment relationship being terminated pursuant to Section 3.2(iii) as a
result of Employee's death is specified in Section 3.7. The effect of the
employment relationship being terminated pursuant to Section 3.2(iv) as a result
of the Employee becoming incapacitated is specified in Section 3.8.

         3.3. Notwithstanding any other provisions of this Agreement, Employee
shall have the right to terminate the employment relationship under this
Agreement at any time for any of the following reasons:

         (i)      a material breach by Employer of any material provision of
                  this Agreement, which remains uncorrected for 30 days
                  following written notice of such breach by Employee to
                  Employer's Board of Directors;

         (ii)     the occurrence of a Corporate Change. A Corporate Change shall
                  occur (a) if Employer is dissolved and liquidated; (b) if
                  Employer is not the surviving entity in any merger or
                  consolidation (or survives only as a subsidiary of an entity);
                  (c) if Employer sells, leases or exchanges or agrees to sell,
                  lease or exchange all or substantially all of its assets; (d)
                  if any person, entity or group acquires or gains ownership or
                  control of more than 50% of the outstanding shares of
                  Employer's voting stock; or (e) if after a contested election
                  of directors, the persons who were directors before such
                  election cease to constitute a majority of the Board of
                  Directors of Employer; or

         (iii)    for any other reason whatsoever, in the sole discretion of
                  Employee.

The termination of Employee's employment by Employee shall constitute an
"Involuntary Termination" if made pursuant to Section 3.3(i) or 3.3(ii); the
effect of such termination is specified in Section 3.5. The termination of
Employee's employment by Employee shall constitute a "Voluntary Termination" if
made pursuant to Sections 3.3(iii); the effect of such termination is specified
in Section 3.4.

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         3.4. Upon a "Voluntary Termination" of the employment relationship by
Employee or a termination of the employment relationship for "Cause" by
Employer, all future compensation to which Employee is entitled and all future
benefits for which Employee is eligible shall cease and terminate as of the date
of termination. Employee shall be entitled to pro rata salary through the date
of such termination, but Employee shall not be entitled to any bonuses with
respect to the operations of the Employer and its subsidiaries and affiliates
during the calendar year in which Employee's employment with Employer is
terminated.

         3.5. Upon an Involuntary Termination of the employment relationship by
either Employer or Employee pursuant to Sections 3.2(ii) or 3.3(i), Employee
shall be entitled, in consideration of Employee's continuing obligations
hereunder after such termination (including, without limitation, Employee's
non-competition obligations), to receive the compensation specified in Section
2.1, plus an amount for each remaining year (or pro-rata portion of such year)
equal to the incentive compensation earned by Employee under Section 2.2 for the
calendar year immediately prior to termination, payable semi-monthly, as if
Employee's employment (which shall cease on the date of such Involuntary
Termination) had continued for the full Term of this Agreement. Upon an
Involuntary Termination of the employment relationship by Employee pursuant to
Sections 3.3(ii), Employee shall be entitled, in consideration of Employee's
continuing obligations hereunder after such termination (including, without
limitation, Employee's non-competition obligations), to receive in a lump sum
payment the compensation specified in Section 2.1, plus an amount for each
remaining year of the Term (or a pro-rata portion of such year) equal to the
incentive compensation earned by Employee under Section 2.2 for the calendar
year immediately prior to termination, as if Employee's employment (which shall
cease on the date of such Involuntary Termination) had continued for the full
Term of this Agreement. In the event of an Involuntary Termination pursuant to
Sections 3.2(ii), 3.3(i) or 3.3(ii), all stock options granted to Employee under
Section 2.3 shall become 100% vested, the exercise of which shall continue to be
permitted as if Employee's employment had continued for the full Term of this
Agreement. Employee shall not be under any duty or obligation to seek or accept
other employment following Involuntary Termination and the amounts due Employee
hereunder shall not be reduced or suspended if Employee accepts subsequent
employment. Employee's rights under this Section 3.5 are Employee's sole and
exclusive rights against Employer or its subsidiaries or affiliates, and
Employer's and its subsidiaries' and affiliates' sole and exclusive liability to
Employee under this Agreement, in contract, tort, or otherwise, for any
Involuntary Termination of the employment relationship.

         3.6. Employee covenants not to sue or lodge any claim, demand or cause
of action against Employer based on Involuntary Termination for any monies other
than those specified in Section 3.5. If Employee breaches this covenant,
Employer, and its subsidiaries and affiliates shall be entitled to recover from
Employee all sums expended by Employer, and its subsidiaries and affiliates
(including costs and attorneys' fees) in connection with such suit, claim,
demand or cause of action. Employer and its subsidiaries and affiliates shall
not be entitled to offset any of the amounts specified in the immediately
preceding sentence against amounts otherwise owing by Employer and its
subsidiaries and affiliates to Employee prior to a final determination under the
terms of the arbitration provisions of this Agreement that Employee has breached
the covenant contained in this Section 3.6.

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         3.7. Upon termination of the employment relationship as a result of
Employee's death, Employee's heirs, administrators, or legatees shall be
entitled to Employee's pro rata salary through the date of such termination, but
Employee's heirs, administrators, or legatees shall not be entitled to any
individual bonuses with respect to the operations of the Employer and its
subsidiaries and affiliates during the calendar year in which Employee's
employment with Employer is terminated. All stock options granted to Employee
under Section 2.3 shall become 100% vested.

         3.8. Upon termination of the employment relationship as a result of
Employee's incapacity, Employee shall be entitled to his pro rata salary through
the date of such termination, but Employee shall not be entitled to any
individual bonuses with respect to the operations of the Employer and its
subsidiaries and affiliates during the calendar year in which Employee's
employment with Employer is terminated. All stock options granted to Employee
under Section 2.3 shall become 100% vested.

         3.9. In all cases, the compensation and benefits payable to Employee
under this Agreement upon termination of the employment relationship shall be
reduced and offset by any amounts to which Employee may otherwise be entitled
under any and all severance plans (excluding any pension, retirement and profit
sharing plans of Employer that may be in effect from time to time) or policies
of Employer or its subsidiaries or affiliates or any successor to all or a
portion of the business or assets of Employer.

         3.10. Termination of the employment relationship shall not terminate
those obligations imposed by this Agreement which are continuing in nature,
including, without limitation, Employee's obligations of confidentiality,
non-competition and Employee's continuing obligations with respect to business
opportunities that had been entrusted to Employee by Employer during the
employment relationship.

         3.11. This Agreement governs the rights and obligations of Employer and
Employee with respect to Employee's salary and other perquisites of employment.

4.       UNITED STATES FOREIGN CORRUPT PRACTICES ACT AND OTHER LAWS:

         4.1. Employee shall at all times comply with United States laws
applicable to Employee's actions on behalf of Employer and its subsidiaries and
affiliates, including specifically, without limitation, the United States
Foreign Corrupt Practices Act, generally codified in 15 USC 78 (FCPA), as the
FCPA may hereafter be amended, and/or its successor statutes. If Employee pleads
guilty to or nolo contendre or admits civil or criminal liability under the FCPA
or other applicable United States law, or if a court finds that Employee has
personal civil or criminal liability under the FCPA or other applicable United
States law, or if a court finds that Employee committed an action resulting in
Employer or any of its subsidiaries having civil or criminal liability or
responsibility under the FCPA or other applicable United States law, such action
or finding shall constitute "cause" for termination under this Agreement unless
Employer's Board of Directors determines that the actions found to be in
violation of the FCPA or other applicable United States law were taken in good
faith and in compliance with all applicable policies of Employer. Moreover, to
the extent that Employer or any of its subsidiaries is found or held responsible
for any civil or criminal fines or sanctions of any type under the FCPA or other
applicable United States law or suffers other damages as a result of Employee's
actions, Employee shall be responsible for, and shall reimburse and pay to such
Employer an amount of money equal to, such civil or criminal fines,

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sanctions or damages. The rights afforded Employer under this provision are in
addition to any and all rights and remedies otherwise afforded by the law.

5.       OWNERSHIP AND PROTECTION OF INFORMATION; COPYRIGHTS:

         5.1. Employer owns certain confidential and proprietary information and
trade secrets to which Employee will be given access for the purpose of carrying
out his or her employment responsibilities hereunder. Furthermore, Employer
agrees to provide Employee with confidential and proprietary information and
trade secrets regarding the Employer and its subsidiaries and affiliates, in
order to assist Employee in satisfying his or her obligations hereunder.

         5.2 All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by Employer (whether during business hours or otherwise
and whether on Employer's premises or otherwise) which relate to Employers or
any of its subsidiaries' or affiliates' businesses, products or services
(including, without limitation, all such information relating to corporate
opportunities, research, financial and sales data, pricing and trading terms,
evaluations, opinions, interpretations, acquisition prospects, the identity of
customers or their requirements, the identity of key contacts within the
customer's organizations or within the organization of acquisition prospects, or
marketing and merchandising techniques, prospective names, and marks) shall be
disclosed to Employer and are and shall be the sole and exclusive property of
Employer. Upon termination of Employee's employment, for any reason, Employee
promptly shall deliver the same, and all copies thereof, to Employer.

         5.3. Employee will not, at any time during or after his employment by
Employer, make any unauthorized disclosure of any confidential business
information or trade secrets of Employer or its subsidiaries or affiliates, or
make any use thereof, except in the carrying out of his employment
responsibilities hereunder. As a result of Employee's employment by Employer,
Employee may also from time to time have access to, or knowledge of,
confidential business information or trade secrets of third parties, such as
customers, suppliers, partners, joint venturers, and the like, of Employer and
its subsidiaries and affiliates. Employee also agrees to preserve and protect
the confidentiality of such third party confidential information and trade
secrets to the same extent, and on the same basis, as Employer's or any of its
subsidiaries' or affiliates' confidential business information and trade
secrets.

         5.4. If, during Employee's employment by Employer, Employee creates any
original work of authorship fixed in any tangible medium of expression which is
the subject matter of copyright (such as videotapes, written presentations on
acquisitions, computer programs, E-mail, voice mail, electronic databases,
drawings, maps, architectural renditions, models, manuals, brochures, or the
like) relating to Employer's, or any of its subsidiaries or affiliates'
businesses, products, or services, whether such work is created solely by
Employee or jointly with others (whether during business hours or otherwise and
whether on Employer's or any of its subsidiaries' or affiliates' premises or
otherwise), Employer shall be deemed the author of such work if the work is
prepared by Employee in the scope of his or her employment; or, if the work is
not prepared by Employee within the scope of his or her employment but is
specially ordered by Employer or any of its subsidiaries or affiliates as a
contribution to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work,

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as a compilation, or as an instructional text, then the work shall be considered
to be work made for hire and Employer or any of its subsidiaries or affiliates
shall be the author of the work. If such work is neither prepared by Employee
within the scope of his or her employment nor a work specially ordered that is
deemed to be a work made for hire, then Employee hereby agrees to assign, and by
these presents does assign, to Employer all of Employee's worldwide right,
title, and interest in and to such work and all rights of copyright therein.

         5.5. Both during the period of Employee's employment by Employer and
thereafter, Employee shall assist Employer, or any of its subsidiaries or
affiliates and their nominees, at any time, in the protection of Employer's or
any of its subsidiaries' or affiliates' worldwide right, title, and interest in
and to information, ideas, concepts, improvements, discoveries, and inventions,
and its copyrighted works, including without limitation, the execution of all
formal assignment documents requested by Employer or any of its subsidiaries or
affiliates or their nominees and the execution of all lawful oaths and
applications for applications for patents and registration of copyright in the
United States and foreign countries.

6.       POST-EMPLOYMENT NON-COMPETITION OBLIGATIONS:

         6.1. As part of the consideration for the compensation and benefits to
be paid and extended to Employee hereunder, and as an additional incentive for
Employer to enter into this Agreement, Employer and Employee agree to the
non-competition provisions of this Article 6. Employee agrees that during the
period of Employee's non-competition obligations hereunder, Employee will not,
directly or indirectly for Employee or for others, in any geographic area or
market where Employer or any of its subsidiaries or affiliated companies are
conducting any business as of the date of termination of the employment
relationship or have during the previous twelve months conducted any business:

         (i)      engage in any business competitive with any line of business
                  conducted by Employer or any of its subsidiaries or
                  affiliates;

         (ii)     render advice or services to, or otherwise assist, any other
                  person, association, or entity who is engaged, directly or
                  indirectly, in any business competitive with any line of
                  business conducted by Employer or any of its subsidiaries or
                  affiliates;

         (iii)    encourage or induce any current or former employee of Employer
                  or any of its subsidiaries or affiliates to leave the
                  employment of Employer or any of its subsidiaries or
                  affiliates or proselytize, offer employment, retain, hire or
                  assist in the hiring of any such employee by any person,
                  association, or entity not affiliated with Employer or any of
                  its subsidiaries or affiliates; provided, however, that
                  nothing in this subsection (iii) shall prohibit Employee from
                  offering employment to any prior employee of Employer or any
                  of its subsidiaries or affiliates who was not employed by
                  Employer or any of its subsidiaries or affiliates at any time
                  in the twelve (12) months prior to the termination of
                  Employee's employment.

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The non-competition obligations set forth in subsections (i) and (ii) of this
Section 6.1 shall apply during Employee's employment and for a period of two (2)
years after termination of employment. The obligations set forth in subsection
(iii) of this Section 6.1 with respect to employees shall apply during
Employee's employment and for a period of three (3) years after termination of
employment. If Employer or any of its subsidiaries or affiliates abandons a
particular aspect of its business, that is, ceases such aspect of its business
with the intention to permanently refrain from such aspect of its business, then
this post-employment non-competition covenant shall not apply to such former
aspect of that business.

         6.2. Employee understands that the foregoing restrictions may limit his
ability to engage in certain businesses anywhere in the world during the period
provided for above, but acknowledges that Employee will receive sufficiently
high remuneration and other benefits (e.g., the right to receive compensation
under Section 3.6 for the remainder of the Term upon Involuntary Termination and
access to certain confidential and proprietary information and trade secrets)
under this Agreement to justify such restriction. Employee acknowledges that
money damages would not be sufficient remedy for any breach of this Article 6 by
Employee, and Employer or any of its subsidiaries or affiliates shall be
entitled to enforce the provisions of this Article 6 by terminating any payments
then owing to Employee under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach, without
any requirement for the securing or posting of any bond in connection with such
remedies. Such remedies shall not be deemed the exclusive remedies for a breach
of this Article 6, but shall be in addition to all remedies available at law or
in equity to Employer or any of its subsidiaries or affiliates, including,
without limitation, the recovery of damages from Employee and his agents
involved in such breach.

         6.3. It is expressly understood that the restrictions contained in this
Article 6 are related to and result from the agreements of Employer and Employee
in Article 5 and agreed that Employer and Employee consider the restrictions
contained in this Article 6 to be reasonable and necessary to protect the
confidential and proprietary information and trade secrets of Employer and its
subsidiaries and affiliates. Nevertheless, if any of the aforesaid restrictions
are found by a court having jurisdiction to be unreasonable, or overly broad as
to geographic area or time, or otherwise unenforceable, the parties intend for
the restrictions therein set forth to be modified by such courts so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced.

7.       MISCELLANEOUS:

         7.1. For purposes of this Agreement the terms "affiliates" or
"affiliated" means an entity who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
Employer.

         7.2. Employee shall refrain, both during the employment relationship
and after the employment relationship terminates, from publishing any oral or
written statements about Employer or any of its subsidiaries' or affiliates'
directors, officers, employees, agents or representatives that are slanderous,
libelous, or defamatory; or that disclose private or confidential information
about Employer or any of its subsidiaries' or affiliates' business affairs,
officers, employees, agents, or representatives; or that constitute an intrusion
into the seclusion or private lives of Employer or any of its subsidiaries'

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or affiliates' directors, officers, employees, agents, or representatives; or
that give rise to unreasonable publicity about the private lives of Employer or
any of its subsidiaries' or affiliates' officers, employees, agents, or
representatives; or that place Employer or its subsidiaries' or affiliates'
officers, employees, agents, or representatives in a false light before the
public; or that constitute a misappropriation of the name or likeness of
Employer or any of its subsidiaries' or affiliates' or its officers, employees,
agents, or representatives. A violation or threatened violation of this
prohibition may be enjoined.

         7.3. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

         If to Employer to:

                  Group 1 Automotive, Inc.
                  950 Echo Lane, Suite 100
                  Houston, TX 77024
                  Attn: Chief Executive Officer

         with a copy to:

                  Vinson & Elkins L.L.P.
                  2300 First City Tower
                  1001 Fannin Street
                  Houston, TX 77002-6760
                  Attn: John S. Watson

         If to Employee, to the address shown on the first page hereof.

Either Employer or Employee may furnish a change of address to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective only upon receipt.

         7.4. This Agreement shall be governed in all respects by the laws of
the State of Texas, excluding any conflict-of-law rule or principle that might
refer the construction of the Agreement to the laws of another State or country.

         7.5. No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition
or provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

         7.6. It is a desire and intent of the parties that the terms,
provisions, covenants, and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant, or remedy of this Agreement or the application thereof to any person,
association, or entity or circumstances shall, to any extent, be construed to be
invalid or unenforceable in whole or in part, then such term, provision,
covenant, or remedy shall be construed in a manner so as to permit its

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enforceability under the applicable law to the fullest extent permitted by law.
In any case, the remaining provisions of this Agreement or the application
thereof to any person, association, or entity or circumstances other than those
to which they have been held invalid or unenforceable, shall remain in full
force and effect.

         7.7. Any and all claims, demands, cause of action, disputes,
controversies and other matters in question arising out of or relating to this
Agreement, any provision hereof, the alleged breach thereof, or in any way
relating to the subject matter of this Agreement, involving Employer, its
subsidiaries and affiliates and Employee (all of which are referred to herein as
"Claims"), even though some or all of such Claims allegedly are
extra-contractual in nature, whether such Claims sound in contract, tort or
otherwise, at law or in equity, under state or federal law, whether provided by
statute or the common law, for damages or any other relief, including equitable
relief and specific performance, shall be resolved and decided by binding
arbitration pursuant to the Federal Arbitration Act in accordance with the
Commercial Arbitration Rules then in effect with the American Arbitration
Association. In the arbitration proceeding the Employee shall select one
arbitrator, the Employer shall select one arbitrator and the two arbitrators so
selected shall select a third arbitrator. Should one party fail to select an
arbitrator within five days after notice of the appointment of an arbitrator by
the other party or should the two arbitrators selected by the Employee and the
Employer fail to select an arbitrator within ten days after the date of the
appointment of the last of such two arbitrators, any person sitting as a Judge
of the United States District Court of the Southern District of Texas, Houston
Division, upon application of the Employee or the Employer, shall appoint an
arbitrator to fill such space with the same force and effect as though such
arbitrator had been appointed in accordance with the immediately preceding
sentence of this Section 7.7. The decision of a majority of the arbitrators
shall be binding on the Employee, the Employer and its subsidiaries and
affiliates. The arbitration proceeding shall be conducted in Houston, Texas.
Judgment upon any award rendered in any such arbitration proceeding may be
entered by any federal or state court having jurisdiction.

         This agreement to arbitrate shall be enforceable in either federal or
state court. The enforcement of this agreement to arbitrate and all procedural
aspects of this Agreement to arbitrate, including but not limited to, the
construction and interpretation of this agreement to arbitrate, the scope of the
arbitrable issues, allegations of waiver, delay or defenses to arbitrability,
and the rules governing the conduct of the arbitration, shall be governed by and
construed pursuant to the Federal Arbitration Act.

         In deciding the substance of any such Claim, the Arbitrators shall
apply the substantive laws of the State of Texas; provided, however, that the
Arbitrators shall have no authority to award treble, exemplary or punitive type
damages under any circumstances regardless of whether such damages may be
available under Texas law, the parties hereby waiving their right, if any, to
recover treble, exemplary or punitive type damages in connection with any such
Claims.

         7.8. This Agreement shall be binding upon and inure to the benefit of
Employer its subsidiaries and affiliates and any other person, association, or
entity which may hereafter acquire or succeed to all or a portion of the
business or assets of Employer by any means whether direct or indirect, by
purchase, merger, consolidation, or otherwise. Employee's rights and obligations
under this Agreement are personal and such rights, benefits, and obligations of
Employee shall not be voluntarily

                                      -11-
<PAGE>

or involuntarily assigned, alienated, or transferred, whether by operation of
law or otherwise, by Employee without the prior written consent of Employer.

         7.9. Except as provided in (1) written company policies promulgated by
Employer dealing with issues such as securities trading, business ethics,
governmental affairs and political contributions, consulting fees, commissions
and other payments, compliance with law, investments and outside business
interests as officers and employees, reporting responsibilities, administrative
compliance, and the like, (2) the written benefits, plans, and programs
referenced in Sections 2.2, 2.3 and 2.4, or (3) any signed written agreements
contemporaneously or hereafter executed by Employer and Employee, this Agreement
constitutes the entire agreement of the parties with regard to such subject
matters, and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect to such subject
matters and replaces and merges previous agreements and discussions pertaining
to the employment relationship between Employer and Employee. Specifically, but
not by way of limitation, any other employment agreement or arrangement in
existence as of the date hereof between Employer or any of its subsidiaries or
affiliates and Employee is hereby canceled and Employee hereby irrevocably
waives and renounces all of Employee's rights and claims under any such
agreement or arrangement.

         IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement in multiple originals to be effective on the date first stated above.

                                        GROUP 1 AUTOMOTIVE, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        Name:
                                        Title:

                                        ----------------------------------------
                                        B. B. Hollingsworth, Jr.
                                        Employee

                                      -12-<PAGE>
                                                                   EXHIBIT 10.23

                                FOURTH AMENDMENT
                                       TO
             FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

         THIS FOURTH AMENDMENT TO FOURTH AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "AMENDMENT") dated effective as of November 9, 2001, is entered
into among GROUP 1 AUTOMOTIVE, INC., a Delaware corporation (the "COMPANY"),
each of the subsidiaries of the Company listed on the signature pages attached
to the Fourth Amended and Restated Revolving Credit Agreement (as defined
herein) (the "SUBSIDIARIES") and such other subsidiaries of the Company which
have become parties to the Fourth Amended and Restated Revolving Credit
Agreement by execution of an Addendum (the "ADDENDUM BORROWERS") (the Company,
the Subsidiaries and Addendum Borrowers are collectively, the "BORROWERS"), the
Lenders listed on the signature pages attached to the Fourth Amended and
Restated Revolving Credit Agreement (the "LENDERS"), THE CHASE MANHATTAN BANK,
as Administrative Agent for the Lenders (in such capacity together with any
successor in such capacity pursuant to Section 12.6 of the Fourth Amended and
Restated Revolving Credit Agreement, the "AGENT"), COMERICA BANK, a Michigan
banking association, as Floor Plan Agent for the Lenders (in such capacity
together with any successor in such capacity pursuant to Section 12.13 of the
Fourth Amended and Restated Revolving Credit Agreement, the "FLOOR PLAN AGENT"),
BANK OF AMERICA, N.A., as Documentation Agent, U.S. BANK NATIONAL ASSOCIATION,
and BANK ONE, N.A., as Co-Agents.

                              WITNESSETH:

         WHEREAS, on December 31, 1997, the Borrowers, the Lenders party
thereto, the Agent and the Floor Plan Agent entered into the Revolving Credit
Agreement (the "INITIAL AGREEMENT"), whereby, upon the terms and conditions
therein stated, such Lenders agreed to make loans to the Borrowers up to the
aggregate amount of $125,000,000, to be used by the Borrowers for the purposes
set forth in Section 9.9 of the Initial Agreement; and

         WHEREAS, on June 19, 1998, the Borrowers, the Lenders party thereto,
the Agent and the Floor Plan Agent amended the Initial Agreement and entered
into an Amended and Restated Revolving Credit Agreement (hereinafter called the
"AMENDED AND RESTATED AGREEMENT") whereby, upon the terms and conditions therein
stated, such Lenders agreed to make loans to the Borrowers up to the aggregate
amount of $345,000,000 to be used by the Borrowers for the purposes set forth in
Section 9.9 of the Amended and Restated Agreement; and

         WHEREAS, on November 10, 1998, the Borrowers, the Lenders party
thereto, the Agent and the Floor Plan Agent amended the Amended and Restated
Agreement and entered into the Second Amended and Restated Revolving Credit
Agreement (hereinafter called the "SECOND AMENDED AND RESTATED AGREEMENT")
whereby, upon the terms and conditions therein stated, such Lenders agreed to
make loans to the Borrowers up to the aggregate amount of $425,000,000 to be
used by the Borrowers for the purposes set forth in Section 9.9 of the Second
Amended and Restated Agreement; and

         WHEREAS, on May 12, 1999, the Borrowers, the Lenders parties thereto,
the Agent and the Floor Plan Agent amended the Second Amended and Restated
Agreement and entered into the Third Amended and Restated Revolving Credit
Agreement (hereinafter called the "THIRD AMENDED AND RESTATED AGREEMENT")
whereby, upon the terms and conditions therein stated, such Lenders agreed to
make loans to the Borrowers up to the aggregate amount of $500,000,000 to be
used by the Borrowers for the purposes set forth in Section 9.9 of the Third
Amended and Restated Agreement; and

<PAGE>

         WHEREAS, on October 15, 1999, and effective as of November 1, 1999, the
Borrowers, the Lenders parties thereto, the Agent and the Floor Plan Agent
amended the Third Amended and Restated Agreement and entered into the Fourth
Amended and Restated Revolving Credit Agreement whereby, upon the terms and
conditions therein stated, such Lenders agreed to make loans to the Borrowers up
to the aggregate amount of $1,000,000,000 to be used by the Borrowers for the
purposes set forth in Section 9.9 of the Fourth Amended and Restated Agreement;

         WHEREAS, on March 7, 2000, the Borrowers, the Lenders parties thereto,
the Agent and the Floor Plan Agent amended the Fourth Amended and Restated
Revolving Credit Agreement and entered into the Amendment to Fourth Amended and
Restated Revolving Credit Agreement (hereinafter called the "FIRST AMENDMENT")
whereby, upon the terms and conditions therein stated, such Lenders and the
Borrowers agreed to amend the "Restricted Payments" provision set forth in
Section 10.13(d) of the Fourth Amended and Restated Revolving Credit Agreement;

         WHEREAS, on May 22, 2000, the Borrowers, the Lenders parties thereto,
the Agent and the Floor Plan Agent amended the Fourth Amended and Restated
Revolving Credit Agreement and entered into the Second Amendment to Fourth
Amended and Restated Revolving Credit Agreement (hereinafter called the "SECOND
AMENDMENT") whereby, upon the terms and conditions therein stated, such Lenders
and the Borrowers agreed to amend certain provisions of the Fourth Amended and
Restated Revolving Credit Agreement;

         WHEREAS, on December 1, 2000, the Borrowers, the Lenders parties
thereto, the Agent and the Floor Plan Agent amended the Fourth Amended and
Restated Revolving Credit Agreement and entered into the Third Amendment to
Fourth Amended and Restated Revolving Credit Agreement (hereinafter called the
"THIRD AMENDMENT") whereby, upon the terms and conditions therein stated, such
Lenders and the Borrowers agreed to amend certain provisions of the Fourth
Amended and Restated Revolving Credit Agreement (the Fourth Amended and Restated
Revolving Credit Agreement as amended by the First Amendment, the Second
Amendment and Third Amendment is collectively referred to herein as the "FOURTH
AMENDED AND RESTATED AGREEMENT");

         WHEREAS, the Borrowers, the Lenders, the Agent and the Floor Plan Agent
mutually desire to further amend certain aspects of the Fourth Amended and
Restated Agreement as set forth herein; and

         WHEREAS, unless otherwise expressly provided in this Amendment,
capitalized terms used in this Amendment shall have the same meanings specified
in the Fourth Amended and Restated Agreement.

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

                                    ARTICLE I
            CERTAIN DEFINED TERMS, ACCOUNTING TERMS AND CONSTRUCTION

         Section 1.1 Certain Defined Terms. As used in the Fourth Amended and
Restated Agreement, the following terms are amended or added thereto, as
applicable, and have the following meanings:

         "Collateral" means the collateral described in each of the Security
Documents.

                                      -2-
<PAGE>

                                   ARTICLE II
                                    THE LOANS

         Section 2.1 Replacement Lenders. A new Section 5.17 is hereby added to
the Fourth Amended and Restated Agreement as follows:

         Section 5.17 Replacement Lenders.

         (a) If any Lender (i) makes a demand for compensation pursuant to
         Section 5.8(a), (b) or (c), (ii) notifies the Agent of the unlawfulness
         of such Lender making or maintaining Eurodollar Loans as provided in
         Section 5.9, (iii) requests the Borrowers to make payments for Taxes or
         Other Taxes pursuant to Section 5.14, or (iv) gives the Agent notice as
         provided in Section 5.16(b) that it is unwilling to extend the Maturity
         Date or fails to provide approval of such extension, then in any such
         event the Company may, unless such Lender has notified the Company that
         the circumstances giving rise to such event no longer apply, terminate,
         in whole but not in part, the Commitments of such Lender (other than
         the Agent) (the "TERMINATED LENDER") at any time upon five Business
         Days' prior written notice to the Terminated Lender and the Agent (such
         notice referred to herein as a "NOTICE OF TERMINATION").

         (b) In order to effect the termination of the Commitments of a
         Terminated Lender, the Company shall (i) obtain an agreement with one
         or more Lenders to increase their Commitments or (ii) request any one
         or more other Persons to become a "Lender" in place and instead of such
         Terminated Lender and agree to accept its Commitments; provided,
         however, that such one or more other such Persons are Eligible
         Assignees reasonably acceptable to the Agent (such acceptance not to be
         unreasonably withheld or delayed) and become parties by executing an
         Assignment and Acceptance and (the Lenders or other Persons that agree
         to accept in whole or in part the Commitments being referred to herein
         as the "REPLACEMENT LENDERS"), such that the aggregate increased and/or
         accepted Commitments of the Replacement Lenders under clauses (i) and
         (ii) above equal the Commitments of the Terminated Lenders.

         (c) The Notice of Termination shall include the name of the Terminated
         Lender, the date the termination will occur (the "TERMINATION DATE"),
         the Replacement Lender or Replacement Lenders to which the Terminated
         Lender will assign its Commitments, and, if there will be more than one
         Replacement Lender, the portion of the Terminated Lender's Commitments
         to be assigned to each Replacement Lender.

         (d) On the Termination Date, (i) the Terminated Lender shall by
         execution and delivery of an Assignment and Acceptance assign its
         Commitments to the Replacement Lender or Replacement Lenders (pro rata,
         if there is more than one Replacement Lender, in proportion to the
         portion of the Terminated Lender's Commitments to be assigned to each
         Replacement Lender) indicated in the Notice of Termination and shall
         assign to the Replacement Lender or Replacement Lenders its Loans (if
         any) so assigned then outstanding (pro rata as aforesaid), (ii) the
         Terminated Lender shall endorse its applicable Note(s), payable without
         recourse, representation or warranty to the order of the Replacement
         Lender or Replacement Lenders (pro rata as aforesaid), (iii) the
         Replacement Lender or Replacement Lenders shall purchase the Note(s)
         held by the Terminated Lender (pro rata as aforesaid) at a price equal
         to the unpaid principal amount thereof plus interest and fees accrued
         and unpaid to the Termination Date, (iv) the Company and each of its
         Subsidiaries shall, upon request, execute and deliver, at its own
         expense, new Notes to the Replacement Lenders in accordance with their
         respective interests,

                                      -3-
<PAGE>

         (v) the Company shall, upon request, pay any compensation due to the
         Terminated Lender pursuant to Section 5.8, and (vi) the Replacement
         Lender or Replacement Lenders will thereupon (pro rata as aforesaid)
         succeed to and be substituted in all respects for the Terminated Lender
         to the extent of such assignment from and after such date with the like
         effect as if becoming a Lender pursuant to the terms of Section 13.3.
         To the extent not in conflict, the terms of Section 13.3 shall
         supplement the provisions of this Section 5.17.

                                   ARTICLE III
                              AFFIRMATIVE COVENANTS

         Section 3.1 Insurance. Section 9.3 of the Fourth Amended and Restated
Agreement is hereby amended to read in its entirety as follows:

         Section 9.3 Insurance.

         (a) The Company will maintain, on a consolidated basis, insurance to
         such extent and against such hazards and liabilities as is commonly
         maintained by companies similarly situated or as may be required in the
         Security Documents including, without limitation, with respect to Motor
         Vehicles owned by Floor Plan Borrowers, naming the Agent, for the
         benefit of the Lenders, as Mortgagee (in connection with any real
         estate collateral), lender loss payee and additional loss payee.

         (b) Unless the Company provides the Agent with evidence of the
         insurance coverage as required by the Agreement or any other Loan
         Document, the Agent (at its discretion, or acting at the request of the
         Floor Plan Agent) may purchase insurance at the Company's expense to
         protect the Lenders' interest. This insurance may, but need not, also
         protect the Company's interest. If the Collateral becomes damaged, the
         coverage the Agent purchases may not pay any claim the Company or any
         of its Subsidiaries makes or any claim made against the Company or any
         of its Subsidiaries. The Company may later cancel this coverage by
         providing evidence that the Company has obtained property coverage
         elsewhere.

         (c) The Company is responsible for the cost of any insurance purchased
         by the Agent. The cost of this insurance may be added to the
         Obligations. If the cost is added to the Obligations, the interest rate
         provided in Section 5.3 shall apply to such added amount. The effective
         date of coverage may be the date the Company's prior coverage lapsed or
         the date the Company failed to provide proof of coverage.

         (d) The Company acknowledges that the coverage the Agent purchases may
         be considerably more expensive than insurance the Company can obtain on
         its own and may not satisfy any need for property damage coverage or
         any mandatory liability insurance requirements imposed by applicable
         law.

         Section 3.2 Litigation and Other Notices. Section 9.6(a) of the Fourth
Amended and Restated Agreement is hereby amended to read in its entirety as
follows:

         (a) Judgment. The entry of any judgment or decree against the Company
         and/or any of its other Subsidiaries if the aggregate amount of such
         judgment or decree exceeds One Million Dollars ($1,000,000) (after
         deducting the amount with respect to which the Company or such
         Subsidiary is insured and with respect to which the insurer has assumed
         responsibility in writing);

                                      -4-
<PAGE>

         Section 3.3 Demonstrators and Rental Motor Vehicles. Section 9.13 of
the Fourth Amended and Restated Agreement is hereby amended to read in its
entirety as follows:

         Section 9.13 Demonstrators and Rental Motor Vehicles. Each Borrower
         shall maintain records at the premises where the Motor Vehicles are
         kept evidencing which Motor Vehicles are being used as Demonstrators
         and Rental Motor Vehicles.

         Section 3.4 Permitted Acquisitions. Section 9.16(a) of the Fourth
Amended and Restated Agreement is hereby amended to read in its entirety as
follows:

         (a) Subject to the remaining provisions of this Section 9.16 applicable
         thereto and the requirements contained in the definition of Permitted
         Acquisition, the Company may, from time to time after the Closing Date,
         effect Permitted Acquisitions, as long as with respect thereto each of
         the following conditions are satisfied:

                           (i) no Default or Event of Default is in existence at
                   the time of the consummation of such proposed Acquisition or
                   would exist after giving effect thereto, all representations
                   and warranties contained herein and in the other Loan
                   Documents shall be true and correct in all material respects
                   with the same effect as though such representations and
                   warranties were made on and as of the date of such proposed
                   Acquisition (both before and after giving effect thereto),
                   and no other agreement, contract or instrument to which any
                   Borrower is a party restricts such proposed Acquisition;

                           (ii) the Company shall have given the Agent and the
                   Lenders at least ten (10) days prior written notice of any
                   such proposed Acquisition (each of such notices, a "PERMITTED
                   ACQUISITION NOTICE"), which notice shall contain all
                   information related to the Auto Dealer being acquired and the
                   proposed Acquisition as required in the form of Acquisition
                   Information worksheet attached hereto as Exhibit K, and such
                   additional information as the Agent shall reasonably request,
                   including, without limitation, delivery of the expert reports
                   (if any) prepared by accounting, environmental, and/or other
                   experts which the Company has obtained as the Agent shall
                   reasonably request, and, if requested by Agent, a true and
                   correct copy of the draft purchase agreement, letter of
                   intent or description of material terms or similar agreements
                   executed by the parties thereto in connection with such
                   proposed Acquisition.

                           (iii) INTENTIONALLY DELETED

                           (iv) (A) as soon as available but not more than ten
                   (10) days after the execution thereof, a copy of the executed
                   purchase agreement and all related agreements, schedules and
                   exhibits with respect to such proposed Acquisition and (B) at
                   the time of delivery of the purchase agreement, certification
                   from the Company as to the purchase price for the acquisition
                   (or a formula therefor) and the estimated amount of all
                   related costs, fees and expenses and that, except as
                   described, there are no other amounts which will be payable
                   in connection with the respective proposed Acquisition;

                           (v) the Company shall have given the Agent and the
                   Lenders, at least ten (10) Business Days prior to the closing
                   date of the proposed Acquisition, a good faith estimate made
                   by the Company of its Consolidated Pro Forma EBITDA and
                   Consolidated Pro Forma Floor Plan Interest Expense, the
                   calculations for which, the

                                      -5-
<PAGE>

                   Company shall have furnished to the Agent together with
                   audited statements from an auditor, satisfactory to the
                   Agent, supporting such calculations for Pro Forma Floor Plan
                   Interest Expense (except in the case of an Acquisition, the
                   total consideration exclusive of stock or other equity
                   consideration is $10,000,000 or less, in which event audited
                   statements shall not be required); and

                           (vi) INTENTIONALLY DELETED

                           (vii) INTENTIONALLY DELETED

                           (viii) prior to the consummation of the respective
                   proposed Acquisition, the Company shall furnish the Agent and
                   the Lenders an officer's certificate executed by the chief
                   financial officer of the Company, certifying as to compliance
                   with the requirements of the applicable preceding clauses (i)
                   through (vii), containing the calculations required in this
                   Section 9.16(a). The consummation of each Permitted
                   Acquisition shall be deemed to be a representation and
                   warranty by the Company that all conditions thereto have been
                   satisfied and that same is permitted in accordance with the
                   terms of this Agreement, which representation and warranty
                   shall be deemed to be a representation and warranty for all
                   purposes hereunder.

                           (ix) For each Permitted Acquisition involving the
                   acquisition or creation of a direct or indirect Subsidiary of
                   the Company, (i) not less than 100% of the capital stock or
                   other equity interest of such Subsidiary shall be directly
                   owned by the Company or another Borrower, and (ii) the
                   Acquisition will not have the effect of causing or requiring
                   any direct or indirect Subsidiary of the Company to be
                   engaged in the sale of new Motor Vehicles of a different
                   Manufacturer than the Manufacturer whose new Motor Vehicles
                   such Subsidiary was authorized to sell prior to the
                   Acquisition.

                           (x) The Required Lenders shall have consented in
                   writing to the proposed Acquisition prior to the closing
                   thereof; provided, however, such consent shall be deemed to
                   have been granted if the Required Lenders shall not have
                   given written notice of consent or rejection to the Agent
                   within seven (7) days after receipt by the Agent of the
                   Permitted Acquisition Notice.

                                   ARTICLE IV
                               NEGATIVE COVENANTS

         Section 4.1 Indebtedness. A new Subsection 10.1(n) is hereby added to
the Fourth Amended and Restated Agreement is hereby amended to read in their
entirety as follows:

         (n) Indebtedness to non-Affiliated Persons (other than Subordinated
         Indebtedness) secured solely by Liens permitted under Section 10.2(i);
         provided that the aggregate amount of all Indebtedness permitted under
         this Section 10.1(n) is less than fifteen percent (15%) of
         Stockholders' Equity.

         Section 4.2 Liens. A new subsection 10.2(i) is hereby added to the
Fourth Amended and Restated Agreement as follows:

                                      -6-
<PAGE>

         (i)      Liens on real property, related real property rights (such as
                  rents), improvements on such real property, including fixtures
                  incorporated into such real property or improvements, and all
                  proceeds in respect thereof, provided, that the aggregate
                  amount of all Indebtedness secured by such Liens is less than
                  fifteen percent (15%) of Stockholders Equity.

         Section 4.3 Interest Coverage Ratio. Section 10.15 of the Fourth
Amended and Restated Agreement is hereby amended to read in its entirety as
follows:

         Section 10.15 Interest Coverage Ratio. The Company will not permit (as
         of the end of any fiscal quarter) its Interest Coverage Ratio to be
         less than 2.25 to 1, such ratio to be calculated as of the end of each
         fiscal quarter of the Company based upon the four fiscal quarters
         immediately preceding such date of determination.

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

         Section 5.1 Representations Repeated. The representations and
warranties of the Borrowers contained in the Fourth Amended and Restated
Agreement and the other Loan Documents and otherwise made in writing by or on
behalf of the Borrowers pursuant to the Fourth Amended and Restated Agreement
and the other Loan Documents were true and correct in all material respects when
made, and are true and correct in all material respects at and as of the time of
delivery of this Amendment, except for such changes in the facts represented and
warranted as are not in violation of the Fourth Amended and Restated Agreement,
this Amendment or the other Loan Documents or which were limited to an earlier
date.

         Section 5.2 Loan Documents. All Loan Documents to which the Borrowers
are a party are modified by this Amendment, whether or not such Loan Documents
shall be expressly amended or supplemented in connection herewith.

         Section 5.3 Compliance with Obligations. The Borrowers have performed
and complied with all agreements and conditions contained in the Fourth Amended
and Restated Agreement and the Loan Documents required to be performed or
complied with by the Borrowers prior to or at the time of delivery of this
Amendment.

         Section 5.4 Defaults. There exists, and after giving effect to this
Amendment will exist, no Default or Event of Default, or any condition, or act
which constitutes, or with notice or lapse of time (or both) would constitute an
event of default under any loan agreement, note agreement, or trust indenture to
which the Borrowers are a party.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

         Section 6.1 Events of Default. Subsections 11.1(h) and (j) of the
Fourth Amended and Restated Agreement are hereby amended to read in their
entirety as follows:

         (h) default or defaults (other than defaults in the payment of
         principal or interest) shall be made with respect to any Indebtedness
         of any Borrower, if the total amount of such Indebtedness in default
         exceeds in the aggregate, an amount equal to Three Million Dollars
         ($3,000,000) and if the effect of any such default or defaults shall be
         to accelerate, or to permit the holder or

                                      -7-
<PAGE>

         obligee of any such Indebtedness (or any trustee on behalf of such
         holder or obligee) to accelerate (with or without notice or lapse of
         time or both), the maturity of any such Indebtedness; or any payment of
         principal or interest, regardless of amount, on any Indebtedness of the
         Borrowers which exceeds in the aggregate, an amount equal to Three
         Million Dollars ($3,000,000) shall not be paid when due, whether at
         maturity, by acceleration or otherwise (after giving effect to any
         period of grace as specified in the instrument evidencing or governing
         such Indebtedness);

         (j) there shall be entered against the Company or any of its
         Subsidiaries one or more judgments or decrees in excess of Seven
         Million Dollars ($7,000,000) in the aggregate at any one time
         outstanding for the Company and all such Subsidiaries and all such
         judgments or decrees in the amount of such excess shall not have been
         vacated, discharged, stayed or bonded pending appeal within sixty (60)
         days from the entry thereof, excluding those judgments or decrees for
         and to the extent which the Company or any such Subsidiary is insured
         and with respect to which the insurer has assumed responsibility in
         writing or for and to the extent which the Company or any such
         Subsidiary is otherwise indemnified if the terms of such
         indemnification are satisfactory to the Required Lenders;

                                   ARTICLE VII
                                  MISCELLANEOUS

         Section 7.1 Extent of Amendments. Except as otherwise expressly
provided herein, the Fourth Amended and Restated Agreement, the Loan Documents,
the Notes and the other instruments and agreements referred to therein are not
amended, modified or affected by this Amendment. Except as expressly set forth
herein, all of the terms, conditions, covenants, representations, warranties and
all other provisions of the Fourth Amended and Restated Agreement are herein
ratified and confirmed and shall remain in full force and effect.

         Section 7.2 References. On and after the date on which this Amendment
becomes effective, the terms, "THIS AGREEMENT," "HEREOF," "HEREIN," "HEREUNDER"
and terms of like import, when used herein or in the Fourth Amended and Restated
Agreement shall, except where the context otherwise requires, refer to the
Fourth Amended and Restated Agreement, as amended by this Amendment.

         Section 7.3 Counterparts. This Amendment may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

         Section 7.4 Governing Law; Jurisdiction. This Amendment, the Agreement,
the Notes, the other Loan Documents and all other documents executed in
connection herewith, shall be deemed to be contracts and agreements executed by
the Borrowers, the Agent, the Floor Plan Agent and the Lenders under the laws of
the State of Texas and of the United States of America and for all purposes
shall be governed by, and construed and interpreted in accordance with, the laws
of said state and of the United States of America and as otherwise provided in
the Agreement.

                     [SIGNATURES FOLLOW ON SUCCEEDING PAGES]

                                      -8-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.

                     BORROWERS:

                     GROUP 1 AUTOMOTIVE, INC.,
                     a Delaware corporation

                     By:
                        -------------------------------------------------------
                     Name:    Scott L. Thompson
                              -------------------------------------------------
                     Title:   Senior Vice President
                              -------------------------------------------------

                     Group 1 Realty, Inc., a Delaware corporation; Koons Ford,
                     Inc., a Florida corporation; Courtesy Ford, Inc., a Florida
                     corporation; Flamingo Ford, Inc., a Florida corporation

                     By:
                        -------------------------------------------------------
                     Name:    Scott L. Thompson
                              -------------------------------------------------
                     Title:   Senior Vice President
                              -------------------------------------------------

                                      -9-
<PAGE>

                     Courtesy Nissan, Inc., a Texas corporation; Foyt Motors,
                     Inc., a Texas corporation; Bob Howard Automotive-H, Inc.,
                     an Oklahoma corporation; Howard Pontiac-GMC, Inc., an
                     Oklahoma corporation; Round Rock Nissan, Inc., a Texas
                     corporation; Mike Smith Autoplaza, Inc., a Texas
                     corporation; Smith, Liu & Kutz, Inc., a Texas corporation;
                     Town North Nissan, Inc., a Texas corporation; Town North
                     Suzuki, Inc., a Texas corporation; Mike Smith Automotive-N,
                     Inc., a Texas corporation; Mike Smith Autoplex, Inc., a
                     Texas corporation; Mike Smith Autoplex Buick, Inc., a Texas
                     corporation; Mike Smith Autoplex Dodge, Inc., a Texas
                     corporation; Mike Smith Autoplex-German Imports, Inc., a
                     Texas corporation; Mike Smith Autoplex-V, Inc., a Texas
                     corporation; Highland Autoplex, Inc., a Texas corporation;
                     Mike Smith GM, Inc., a Delaware corporation; Mike Smith
                     Motors, Inc., a Texas corporation; Mike Smith Imports,
                     Inc., a Texas corporation; Jim Tidwell Ford, Inc., a
                     Delaware corporation; Mike Smith Automotive-H, Inc., a
                     Delaware corporation; Johns Automotive Group, Inc., a New
                     Mexico corporation; GPI Acquisition-I, Inc., a Texas
                     corporation; Harvey-T, Inc., a Delaware corporation; Harvey
                     Holdings, Inc., a Delaware corporation; Howard-SI, Inc., a
                     Delaware corporation; Howard-DC, Inc., a Delaware
                     corporation; Howard-GM, Inc., a Delaware corporation;
                     McCall-H, Inc., a Texas corporation; McCall-SI, Inc., a
                     Texas corporation; Group 1 Associates, Inc., a Delaware
                     corporation; GPI Atlanta-T, Inc.., a Delaware corporation;
                     Danvers - DCII, Inc., a Delaware corporation; Danvers - DC,
                     Inc., a Delaware corporation; Danvers - GM, Inc., a
                     Delaware corporation; Danvers - S, Inc., a Delaware
                     corporation; Danvers - SU, Inc., a Delaware corporation;
                     Danvers - T, Inc., a Delaware corporation; Danvers - TL,
                     Inc., a Delaware corporation; Danvers - DCIII, Inc., a
                     Delaware corporation; Bob Howard Chevrolet, Inc., an
                     Oklahoma corporation; Bob Howard Dodge, Inc., an Oklahoma
                     corporation; Bob Howard Motors, Inc., an Oklahoma
                     corporation; Bob Howard Nissan, Inc., an Oklahoma
                     corporation; Howard-GM II, Inc., a Delaware corporation;
                     Howard-H, Inc., a Delaware corporation; Howard-HA, Inc., a
                     Delaware corporation; Bob Howard Automotive-East, Inc., an
                     Oklahoma corporation; Bob Howard German Imports, Inc., an
                     Oklahoma corporation; Casa Chevrolet, Inc., a

                                      -10-
<PAGE>

                     New Mexico corporation; Casa Chrysler Plymouth Jeep, Inc.,
                     a New Mexico corporation; Sunshine Buick Pontiac GMC Truck,
                     Inc., a New Mexico corporation; Luby Chevrolet Co., a
                     Delaware corporation; Perimeter Ford, Inc., a Delaware
                     corporation; GPI Atlanta-FLM, Inc., a Delaware corporation;
                     GPI Atlanta-F, Inc., a Georgia corporation; Key Ford, Inc.,
                     a Florida corporation; Shamrock Chevrolet, Inc., a Florida
                     corporation; Group 1 DCP, Inc., a Delaware corporation

                     By:
                         ------------------------------------------------------
                     Name: Scott L. Thompson
                           ----------------------------------------------------
                     Title: President
                           ----------------------------------------------------

                                      -11-
<PAGE>

                     Maxwell Chrysler, Plymouth, Dodge, Jeep, Eagle, Ltd., a
                     Texas limited partnership; Prestige Chrysler Plymouth
                     South, Ltd., a Texas limited partnership; Prestige Chrysler
                     Plymouth Northwest, Ltd., a Texas limited partnership;
                     Maxwell Ford, Ltd., a Texas limited partnership; Colonial
                     Chrysler-Plymouth, Ltd., a Texas limited partnership;
                     Chaperral Dodge, Ltd., a Texas limited partnership; Lubbock
                     Motors-F, Ltd., a Texas limited partnership; Lubbock
                     Motors-T, Ltd., a Texas limited partnership; Rockwall
                     Automotive-F, Ltd., a Texas limited partnership; Amarillo
                     Motors-C, Ltd., a Texas limited partnership; Amarillo
                     Motors-J, Ltd., a Texas limited partnership; Amarillo
                     Motors-F, Ltd., a Texas limited partnership; GPI, Ltd., a
                     Texas limited partnership; McCall - TL, Ltd., a Texas
                     limited partnership; McCall - HA, Ltd., a Texas limited
                     partnership; McCall - T, Ltd., a Texas limited partnership;
                     Kutz - DC, Ltd., a Texas limited partnership; Lubbock
                     Motors, Ltd., a Texas limited partnership; Maxwell-FII,
                     Ltd., a Texas limited partnership; Lubbock Motors-S, Ltd.,
                     a Texas limited partnership, Amarillo Motors-SM, Ltd., a
                     Texas limited partnership; Amarillo Motors-SH, Ltd., a
                     Texas limited partnership; Maxwell-SM, Ltd., a Texas
                     limited partnership; McCall-TII, Ltd., a Texas limited
                     partnership; Rockwall Dodge, Ltd., a Texas limited
                     partnership; Amarillo Motors-FM, Ltd., a Texas limited
                     partnership

                     By:      Group 1 Associates, Inc., a Delaware
                              corporation, as general partner

                              By:
                                  ---------------------------------------------
                              Name: Scott L. Thompson
                                    -------------------------------------------
                              Title: Vice President
                                     ------------------------------------------

                                      -12-
<PAGE>

                     Group 1 Holdings-DC, L.L.C., a Delaware limited liability
                     company; Group 1 Holdings-F, L.L.C., a Delaware limited
                     liability company; Group 1 Holdings-GM, L.L.C., a Delaware
                     limited liability company; Group 1 Holdings-H, L.L.C., a
                     Delaware limited liability company; Group 1 Holdings-N,
                     L.L.C., a Delaware limited liability company; Group 1
                     Holdings-S, L.L.C., a Delaware limited liability company;
                     Group 1 Holdings-T, L.L.C., a Delaware limited liability
                     company

                     By:      Group 1 Automotive, Inc., a Delaware
                              corporation, as sole member

                              By:
                                  ---------------------------------------------
                              Name: Scott L. Thompson
                                    -------------------------------------------
                              Title: Senior Vice President
                                     ------------------------------------------

                     Harvey Operations-T, LLC, a Delaware limited liability
                     company

                     By:      Harvey-T, Inc., a Delaware corporation, as sole
                              member

                              By:
                                  ---------------------------------------------
                              Name: Scott L. Thompson
                                    -------------------------------------------
                              Title: Vice President
                                     ------------------------------------------

                     Harvey GM, LLC, a Delaware limited liability company;
                     Harvey Ford, LLC, a Delaware limited liability company

                     By:      Harvey Holdings, Inc., a Delaware corporation,
                              as sole member

                              By:
                                  ---------------------------------------------
                              Name: Scott L. Thompson
                                    -------------------------------------------
                              Title: Vice President
                                     ------------------------------------------

                     IRA Automotive Group, LLC, a Delaware limited liability
                     company

                     By:      Danvers - T, Inc., a Delaware corporation, as
                              sole member

                              By:
                                  ---------------------------------------------
                              Name: Scott L. Thompson
                                    -------------------------------------------
                              Title: Vice President
                                     ------------------------------------------

                                      -13-
<PAGE>

                     Group 1 LP Interests-H, Inc., a Delaware corporation; Group
                     1 LP Interests-S, Inc., a Delaware corporation; Group 1 LP
                     Interests-DC, Inc., a Delaware corporation; Group 1 LP
                     Interests-F, Inc., a Delaware corporation; Group 1 LP
                     Interests-GM, Inc., a Delaware corporation; Group 1 LP
                     Interests-N, Inc., a Delaware corporation; Group 1 LP
                     Interests-T, Inc., a Delaware corporation

                              By:
                                  ---------------------------------------------
                              Name: Mathew J. Baer
                                    -------------------------------------------
                              Title: President
                                     ------------------------------------------

                     Delaware Acquisition-DC, L.L.C., A Delaware limited
                     liability company

                     By:      Group 1 LP Interests-DC, Inc., a Delaware
                              corporation

                              By:
                                  ---------------------------------------------
                              Name: Mathew J. Baer
                                    -------------------------------------------
                              Title: President
                                     ------------------------------------------

                     Delaware Acquisition-GM, L.L.C., a Delaware limited
                     liability company

                     By:      Group 1 Interests-GM, Inc., a Delaware
                              corporation

                              By:
                                  ---------------------------------------------
                              Name: Mathew J. Baer
                                    -------------------------------------------
                              Title: President
                                     ------------------------------------------

                     Delaware Acquisition-T, L.L.C., a Delaware limited
                     liability company

                     By:      Group 1 LP Interests-T, Inc., a Delaware
                              corporation

                              By:
                                  ---------------------------------------------
                              Name: Mathew J. Baer
                                    -------------------------------------------
                              Title: President
                                     ------------------------------------------

                                      -14-
<PAGE>

                     Delaware Acquisition-F, L.L.C., a Delaware limited
                     liability company

                     By:      Group 1 LP Interests-F, Inc., a Delaware
                              corporation

                              By:
                                  ---------------------------------------------
                              Name: Mathew J. Baer
                                    -------------------------------------------
                              Title: President
                                     ------------------------------------------

                                      -15-
<PAGE>

                     AGENT AND ISSUING BANK:

                     THE CHASE MANHATTAN BANK

                     By:
                         ------------------------------------------------------
                     Name: James R. Dolphin
                           ----------------------------------------------------
                     Title: Senior Vice President
                            ---------------------------------------------------

                                      -16-
<PAGE>

                     FLOOR PLAN AGENT AND SWING LINE BANK:

                     COMERICA BANK

                     By:
                         ------------------------------------------------------
                     Name: Joseph A. Moran
                           ----------------------------------------------------
                     Title: Senior Vice President
                            ---------------------------------------------------

                                      -17-
<PAGE>

                    LENDERS:

                    AMARILLO NATIONAL BANK

                    By:
                        -------------------------------------------------------
                    Name: R. Wesley Savage
                          -----------------------------------------------------
                    Title: Executive Vice President
                           ----------------------------------------------------

                    Address:           P. O. Box 1
                                       Amarillo, Texas 79105

                    Telecopy No.:      (806) 378-8395

                                      -18-
<PAGE>

                    BMW FINANCIAL SERVICES N.A., INC.

                    By:
                        -------------------------------------------------------
                    Name:
                          -----------------------------------------------------
                    Title:
                           ----------------------------------------------------

                    Address:           5515 Parkcenter Circle
                                       Dublin, OH 43017

                    Telecopy No.:      (800) 362-4269

                                      -19-
<PAGE>

                    BANK OF AMERICA, N.A.

                    By:
                        -------------------------------------------------------
                    Name: Bruce Clay
                          -----------------------------------------------------
                    Title: Senior Vice President
                           ----------------------------------------------------

                    Address:           110 Cypress Station Drive,
                                       Suite 200
                                       Houston, TX  77090

                    Telecopy No.:      (281) 537-3246

                                      -20-
<PAGE>

                    BANK OF OKLAHOMA, N.A.

                    By:
                        -------------------------------------------------------
                    Name: Laura Christofferson
                          -----------------------------------------------------
                    Title: Senior Vice President
                           ----------------------------------------------------

                    Address:           201 Robert S. Kerr
                                       Oklahoma City, OK  73102

                    Telecopy No.:      (405) 272-2588

                                      -21-
<PAGE>

                    BANK ONE, N.A.

                    By:
                        -------------------------------------------------------
                    Name: Jeffrey D. Edge
                          -----------------------------------------------------
                    Title: Vice President
                           ----------------------------------------------------

                    Address:           1424 East North Belt,
                                       Suite 100
                                       Houston, TX  77032

                    Telecopy No.:      (281) 985-2931

                                      -22-
<PAGE>

                    THE CHASE MANHATTAN BANK

                    By:
                        -------------------------------------------------------
                    Name: James R. Dolphin
                          -----------------------------------------------------
                    Title: Senior Vice President
                           ----------------------------------------------------

                    Address:           712 Main Street
                                       5-CBBE-78
                                       Houston, TX  77002

                    Telecopy No.:      (713) 216-6004

                                      -23-
<PAGE>

                    CHRYSLER FINANCIAL COMPANY, L.L.C.

                    By:
                        -------------------------------------------------------
                    Name: R. D. Knight
                         ------------------------------------------------
                    Title: Vice President
                           ----------------------------------------------------

                    Address:           Dealer Credit Department
                                       27777 Franklin Road
                                       Southfield, MI  48034

                    Telecopy No.:      (248) 948-3838

                                      -24-
<PAGE>

                    COMERICA BANK

                    By:
                        -------------------------------------------------------
                    Name: Joseph A. Moran
                          -----------------------------------------------------
                    Title: Senior Vice President
                           ----------------------------------------------------

                    Address:           411 West Lafayette
                                       MC3517, 8th Floor
                                       Detroit, MI  48226

                    Telecopy No.:      (313) 222-7284

                                      -25-
<PAGE>

                    FORD MOTOR CREDIT COMPANY

                    By:
                        -------------------------------------------------------
                    Name: William C. Van Horn
                          -----------------------------------------------------
                    Title: Major Accounts Executive
                           ----------------------------------------------------

                    Address:           The American Road
                                       Dearborn, MI  48121

                    Telecopy No.:      (313) 390-5459

                                      -26-
<PAGE>

                    MERCEDES BENZ CREDIT CORPORATION

                    By:
                        -------------------------------------------------------
                    Name:
                          -----------------------------------------------------
                    Title:
                           ----------------------------------------------------

                    Address:           600 Embassy Row
                                       Suite 160
                                       Atlanta, GA  30328

                    Telecopy No.:      (800) 837-7272

                                      -27-
<PAGE>

                    WELLS FARGO AUTO FINANCE

                    By:
                        -------------------------------------------------------
                    Name:    Marvin P. Harvey
                          -----------------------------------------------------
                    Title:
                           ----------------------------------------------------

                    Address:           One O'Connor Plaza, Fourth Floor
                                       Victoria, TX  77902

                    Telecopy No.:      (361) 574-5854

                                      -28-
<PAGE>

                    TOYOTA MOTOR CREDIT CORPORATION

                    By:
                        -------------------------------------------------------
                    Name:    Tom Brubaker
                          -----------------------------------------------------
                    Title:
                           ----------------------------------------------------

                    Address:           19001 South Western Avenue
                                       Torrance, CA  90509-2958

                    Telecopy No.:      (800) 643-9811

                                      -29-
<PAGE>

                    U.S. BANK NATIONAL ASSOCIATION

                    By:
                        -------------------------------------------------------
                    Name:
                          -----------------------------------------------------
                    Title:
                           ----------------------------------------------------

                    Address:           10800 N.E. 8th Street
                                       Suite 900
                                       Bellevue, WA  98004

                    Telecopy No.:      (425) 450-5762

                                      -30-
<PAGE>

                    CHASE AUTO FINANCE

                    By:
                        -------------------------------------------------------
                    Name:  David Drumm
                           ----------------------------------------------------
                    Title:
                          -----------------------------------------------------

                    Address:          900 Stewart Avenue, First Floor
                                      Garden City, NY  11530

                    Telecopy No.:     (516) 745-4558

                                      -31-
<PAGE>

                    SOVEREIGN BANK

                    By:
                         ------------------------------------------------------
                    Name:  Kyle Bourque
                           ----------------------------------------------------
                    Title: Vice President
                           ----------------------------------------------------

                    Address:          75 State Street
                                      Boston, MA  02109

                    Telecopy No.:     (617) 757-5582

                                      -32-

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