Document:

EX-10.2

EXECUTION COPY

NON-QUALIFIED

STOCK OPTION AGREEMENT

UNDER

LORAL SPACE & COMMUNICATIONS INC.

2005 STOCK INCENTIVE PLAN

THIS AGREEMENT, made as of this 19th day of June, 2006, by and between Loral Space &
Communications Inc., a Delaware corporation (the “Company”), and Dean A. Olmstead (the
“Optionee”).

WHEREAS, the Optionee is employed by or is providing services to the Company or an Affiliate
in a key capacity, and the Company desires to afford Optionee the opportunity to acquire the
Company’s Common Stock, par value $.01 per share (the “Stock”), so that Optionee may have a
direct proprietary interest in the Company’s success;

WHEREAS, all capitalized terms not otherwise defined herein shall have the same meaning as set
forth in Company’s 2005 Stock Incentive Plan (the “Plan”); and

WHEREAS, the Company and the Optionee have entered into a Consulting Agreement dated June 7,
2006 (the “Consulting Agreement”); and

WHEREAS, the Company intends to seek shareholder and any other necessary approvals required to
amend the Plan to increase the number of shares available for grant thereunder (the
“Approvals”).

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

1. Grant of Option. Subject to the terms and conditions set forth herein and in the
Plan, and subject to obtaining the Approvals, the Company hereby grants to the Optionee, during the
period commencing on June 14, 2006 (the “Grant Date”) and ending on the date that is seven
years from the Grant Date (the “Option Period”), the right and option (the right to
purchase any one share of Stock hereunder being an “Option”) to purchase from the Company,
at an exercise price of $27.135 per share (the “Option Price”), an aggregate of 120,000
shares of Stock. The Options are not intended to be “incentive stock options,” as defined in
Section 422 of the Internal Revenue Code of 1986, as amended.

2. Vesting and Exercisability of Options.

(a) Subject to the terms and conditions set forth herein and provided the Optionee’s
employment or service continues,

	 	(X)	 	20,000 of the Options (the “Base Grant Options”) shall
vest and become exercisable in accordance with the following schedule:

(i) one-fourth of the Base Grant Options shall vest and become exercisable on
the one-year anniversary of the Grant Date;

(ii) an additional one-fourth of the Base Grant Options shall vest and become
exercisable on the two-year anniversary of the Grant Date;

(iii) an additional one-fourth of the Base Grant Options shall vest and become
exercisable on the three-year anniversary of the Grant Date; and

(iv) the remainder of the Base Grant Options shall vest and become exercisable
on the four-year anniversary of the Grant Date;

provided, however, that in the event of a Termination Event (as defined in
the Consulting Agreement), the next full tranche of unvested Base Grant Options that would
have vested on the next vesting date following such Termination Event shall vest and become
exercisable; and

	 	(Y)	 	100,000 of the Options (the “Performance Based
Options”) shall vest and become exercisable in accordance with the
following schedule:

(i) 25,000 of the Performance Based Options shall vest and become exercisable
upon closing of a satellite services business transaction with a value to the
Company of between $100 million and less than $250 million;

(ii) 50,000 of the Performance Based Options shall vest and become exercisable
upon closing of a satellite services business transaction with a value to the
Company of between $250 million and less than $500 million;

(iii) 75,000 of the Performance Based Options shall vest and become exercisable
upon closing of a satellite services business transaction with a value to the
Company of between $500 million and less than $1,000 million; and

(iv) 100,000 of the Performance Based Options shall vest and become exercisable
upon closing of a satellite services business transaction with a value to the
Company of $1,000 million or more;

for the avoidance of doubt, for purposes of the above Performance Based Option vesting
schedule, in computing the value of a transaction, value shall mean enterprise value, and,
in the case of a transaction in which the Company is not the sole participant, the
Performance Based Options shall vest based on the value of the transaction to the Company
(e.g., if the Company acquires 40% of a company with an enterprise valuation of $2 billion,
the value of such transaction to the Company would be $800 million). Further, for the
avoidance of doubt, in the case of an agreement entered into by the Company with respect to
a satellite services transaction with a value to the Company that would qualify for vesting,
vesting shall occur upon closing of such transaction notwithstanding the occurrence of a
Termination Event (as defined in the Consulting Agreement) after signing but before closing;

provided, however, that no Options (including both the Base Grant Options
and the Performance Based Options) shall become exercisable (even though vested) prior to
the date on which the Approvals have been obtained and the Options that would have become
exercisable prior to the date the Approvals are obtained, but for this prohibition on
exercisability prior to the date the Approvals are obtained, shall become exercisable on the
date that the Approvals are obtained; and further provided, however,
that, except as otherwise set forth herein, no vesting shall occur following the Optionee’s
termination of employment or service with the Company and all Affiliates.

(b) The Options shall vest only as to full shares of Stock rounded down to the nearest
full share during the first three vesting dates and all fractions shall be amalgamated and
become exercisable on the last vesting date. Except as otherwise stated in this Agreement,
the Options shall expire on the seven-year anniversary of the Grant Date.

3. Exercisability following Termination of Employment or Service.

(a) If the Optionee’s employment or service with the Company and all Affiliates is
terminated for Cause, or if the Optionee resigns from employment or service with the Company
and all Affiliates other than for “Good Reason,” all Options (whether vested or not) shall
immediately expire.

(b) If the Optionee’s employment or service with the Company and all Affiliates is
terminated by the Company or an Affiliate other than for Cause or the Optionee resigns for
“Good Reason,” all Options that are vested at the time of termination will remain outstanding
and exercisable (but only to the extent such Options are exercisable at the time of
termination) until the earlier of (i) three months following the termination of employment of
the Optionee and (ii) the expiration of the Option Period. All Options that are not vested
at the time of such termination shall immediately expire upon such termination of employment.

(c) If the Optionee’s employment or service with the Company and all Affiliates
terminates on account of the Optionee’s death or Disability, all Options that are vested at
the time of such termination will remain outstanding and exercisable (but only to the extent
such Options are exercisable at the time of such termination) until the earlier of (i) one
year following the termination on account of death or Disability of the Optionee (in the case
of death, by the executor or administrator of the estate of the Optionee) and (ii) the
expiration of the Option Period. All Options that are not vested at the time of such
termination shall immediately expire upon such termination of employment.

4. Method of Exercising Option.

(a) Options which have become exercisable may be exercised by delivery of written notice
of exercise to the Committee accompanied by payment of the Option Price. Payment for shares
of Stock acquired pursuant to Options shall be made in full, upon exercise of the Options in
immediately available funds in United States dollars, by certified or bank cashier’s check
or, in the discretion of the Committee, (i) by surrender to the Company of Mature Shares held
by the Participant; (ii) by delivering to the Committee a copy of irrevocable instructions to
a stockbroker to deliver promptly to the Company an amount of sale or loan proceeds
sufficient to pay the aggregate Option exercise price; (iii) through a net exercise of the
Options whereby the Optionee instructs the Company to withhold that number of shares of Stock
having a fair market value equal to the aggregate Option Price of the Options being exercised
and deliver to the Optionee the remainder of the shares subject to exercise or (iv) by any
other means approved by the Committee. For purposes of this paragraph, the term “Mature
Shares” shall mean shares of Stock for which the Optionee has good title, free and clear
of all liens and encumbrances, and which the Optionee either (i) has held for at least six
months or (ii) has purchased on the open market.

(b) At the time of exercise, (i) the Company shall have the right to withhold from the
number of shares of Stock to be issued upon exercise, the minimum number of shares necessary
or (ii) at the discretion of the Committee, the Optionee shall be obligated to pay to the
Company such amount as the Company deems necessary, in either event, to satisfy its
obligation to withhold Federal, state and local income or other taxes incurred by reason of
the exercise or the transfer of shares thereupon.

5. Issuance of Shares. As promptly as practical after receipt by the Company of a
written notice of exercise and full payment to the Company of the aggregate Option Price and any
required income tax withholding amount, the Company shall issue or transfer to the Optionee the
number of shares of Stock with respect to which Options have been so exercised, or the net number
of shares of Stock in the event of an exercise pursuant to Section 4(a)(iii), or to the extent
applicable in Section 4(a)(iv), or after application of Section 4(b), or both, and shall deliver to
the Optionee (or the Optionee’s estate or beneficiary, if applicable) a certificate or certificates
therefore, registered in the name of the Optionee (or such estate or beneficiary).

6. Non-Transferability. The Options are not transferable by the Optionee otherwise
than by will or the laws of descent and distribution and are exercisable during the Optionee’s
lifetime only by Optionee. No assignment or transfer of the Options, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise (except by will or the
laws of descent and distribution), shall vest in the assignee or transferee any interest or right
herein whatsoever, but immediately upon such assignment or transfer the Options shall terminate and
become of no further effect.

7. Rights as Stockholder. Neither the Optionee nor a permitted transferee of the
Options shall have any rights as a stockholder with respect to any share of Stock covered by the
Options until the Optionee or any transferee shall have become the holder of record of such share,
and no adjustment shall be made for dividends or distributions or other rights in respect of such
share for which the record date is prior to the date upon which the Optionee or any transferee
shall become the holder of record thereof.

8. Compliance with Law. Notwithstanding any of the provisions hereof, the Optionee
hereby agrees that Optionee will not exercise the Options, and that the Company will not be
obligated to issue or transfer any shares of Stock to the Optionee hereunder, if the exercise
hereof or the issuance or transfer of such shares shall constitute a violation by the Optionee or
the Company of any provisions of any law or regulation of any governmental authority. Any
determination in this connection by the Committee shall be final, binding and conclusive. The
Company shall in no event be obliged to register any securities pursuant to the Securities Act of
1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to
cause the exercise of the Options or the issuance or transfer of shares of Stock pursuant thereto
to comply with any law or regulation of any governmental authority.

9. Notice. Every notice or other communication relating to this Agreement shall be in
writing, and shall be mailed to or delivered to the party for whom it is intended at such address
as may from time to time be designated by it in a notice mailed or delivered to the other party as
herein provided, provided that, unless and until some other address be so designated, all notices
or communications by the Optionee to the Company shall be mailed or delivered to the Company at its
principal executive office, and all notices or communications by the Company to the Optionee may be
given to the Optionee personally or may be mailed to Optionee at the Optionee’s last known address,
as reflected in the Company’s records.

10. Binding Effect. Subject to Section 6 hereof, this Agreement shall be binding upon
the heirs, executors, administrators and successors of the parties hereto.

11. Governing Law. This Agreement shall be construed and interpreted in accordance
with the laws of the state of Delaware, without regard to the principles of conflicts of law
thereof.

12. Plan. The terms and provisions of the Plan are incorporated herein by reference;
provided, however, that upon an acceleration of vesting of the Options in the event of a Change in
Control, as provided in Section 13(a) of the Plan, the Options shall not be exercisable unless the
Approvals have been obtained by the time the Change in Control occurs. In the event of a conflict
or inconsistency between discretionary terms and provisions of the Plan and the express provisions
of this Agreement, this Agreement shall govern and control. Except as specifically provided
herein, in all other instances of conflicts or inconsistencies or omissions, the terms and
provisions of the Plan shall govern and control.

13. Section 409A. The Options are not intended to be considered “nonqualified
deferred compensation” within the meaning of Section 409A of the Code. It is also intended that
(i) the Option Price per share of Stock to be purchased pursuant to any Option will never be less
than the “fair market value” (determined in a manner consistent with standards of Section 409A of
the Code and the guidance and regulations promulgated thereunder (the “409A Standards”)) of
one share of Stock on the date of the grant of the Options, (ii) the transfer or exercise of the
Options will be subject to taxation pursuant to Section 83 of the Code and Treas. Reg. §1.83-7; and
(iii) no Option will include any feature for the deferral of compensation, other than the deferral
of recognition of income until the later of exercise or disposition of the Option under Treas. Reg.
§1.83-7, or the time the Stock, acquired pursuant to the exercise of the Option, first becomes
substantially vested (as defined in Treas. Reg. §1.83-3(b)). The Company shall indemnify and hold
the Optionee harmless, on an after tax basis, for any additional tax (including interest and
penalties with respect thereto) that may be imposed on the Optionee by Code Section 409A as a
result of the Options being granted subject to the Approvals (the “409A Indemnity”). To
the extent that the Options are considered nonqualified deferred compensation subject to Section
409A of the Code, the Company and the Optionee intend for this Agreement to comply with the 409A
Standards. The Company reserves the right to amend this Agreement at any time without the
Optionee’s consent to cause this Agreement, or any terms of this Agreement, to either comply with
or be exempt from Section 409A of the Code and the 409A Standards and, upon any such amendment, the
409A Indemnity shall expire.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

LORAL SPACE & COMMUNICATIONS INC.

	 	 	 
	By:

Name:

Title:

	 	/s/ Michael B. Targoff

Michael B. Targoff

Chief Executive Officer

Accepted:

/s/ Dean A. Olmstead

Optionee—Dean A. Olmstead

     

Address

     

     

Social Security NumberEX-4.1

$250,000,000

Group 1 Automotive, Inc.

2.25% Convertible Senior Notes due July 15, 2036

Purchase Agreement

June 20, 2006

J.P. Morgan Securities Inc.

c/o J.P. Morgan Securities, Inc.

277 Park Avenue

9th Floor

New York, New York 10172

Ladies and Gentlemen:

Group 1 Automotive, Inc., a Delaware corporation (the “Company”), proposes to issue and sell
to the initial purchasers listed on Schedule I hereto (the “Initial Purchasers”) for whom you are
acting as representative, $250,000,000 principal amount of its 2.25% Convertible Senior Notes due
2036 (the “Firm Securities”) to be issued pursuant to the provisions of an Indenture dated as of
June 26, 2006 (the “Indenture”) between the Company and Wells Fargo Bank, National Association, as
Trustee (the “Trustee”). The Company also proposes to issue and sell to the Initial Purchasers not
more than an additional $37,500,000 principal amount of its 2.25% Convertible Senior Notes due 2036
(the “Additional Securities”, and together with the Firm Securities, the “Securities”) if and to
the extent that the Initial Purchasers shall have determined to exercise the right to purchase such
2.25% Convertible Senior Notes due 2036 granted to the Initial Purchasers in Section 1 hereof. The
Securities will be convertible into shares (the “Underlying Securities”) of common stock of the
Company, par value $0.01 per share (the “Common Stock”).

The Securities and the Underlying Securities will be offered without being registered under
the Securities Act of 1933, as amended (together with the rules and regulations promulgated there
under, the “Securities Act”), only to “qualified institutional buyers” (as defined in the
Securities Act) in compliance with the exemption from registration provided by Rule 144A under the
Securities Act.

Each Initial Purchaser and its direct and indirect transferees will be entitled to the
benefits of a Registration Rights Agreement dated as of the Closing Date among the Company and the
Initial Purchasers (the “Registration Rights Agreement”).

In connection with the sale of the Securities, the Company has prepared a preliminary offering
memorandum (including the documents incorporated by reference therein, the “Preliminary
Memorandum”) and will prepare a final offering memorandum (including the documents incorporated by
reference therein, the “Final Memorandum” and, collectively the “Offering Memorandum”) for the
information of the Initial Purchasers and for delivery to prospective purchasers of the Securities.
The time when sales of Securities are first made or confirmed by the Initial Purchasers to
qualified institutional buyers is referred to as the “Time of Sale,” and the Preliminary
Memorandum, together with the other information referenced on Schedule II hereto, is referred to as
the “Time of Sale Information.”

The Company hereby agrees with the Initial Purchasers as follows:

1. Agreements to Sell and Purchase. The Company agrees to issue and sell the Firm Securities
to the several Initial Purchasers as hereinafter provided, and each Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase severally and not jointly, from the Company the Firm
Securities at a purchase price of 97.75% of the principal amount thereof (the “Purchase Price”), in
the respective principal amount of Securities set forth opposite such Initial Purchaser’s name in
Schedule I hereto plus accrued interest, if any, from June 26, 2006, to the date of payment and
delivery.

On the basis of the representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to sell to the Initial Purchasers the Additional
Securities, and the Initial Purchasers shall have the right to purchase in whole, or from time to
time in part, up to $37,500,000 principal amount of Additional Securities at the Purchase Price
plus accrued interest, if any, from the Closing Date (as defined below) to the date of payment and
delivery, solely to cover over-allotments, if any. If you on behalf of the Initial Purchasers
exercise such option, you shall so notify the Company in writing not later than 13 days after the
date of this Agreement, which notice shall specify the principal amount of Additional Securities to
be purchased by the Initial Purchasers and the date on which such Additional Securities are to be
purchased. Such date may be the same as the Closing Date but not earlier than the Closing Date nor
later than ten business days after the date of such notice.

The Company acknowledges and agrees that the Initial Purchasers are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect to the offering of
Securities and the Underlying Securities contemplated hereby (including in connection with
determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, no Initial Purchaser is advising the
Company or any other person as to any legal, tax, investment, accounting or regulatory matters in
any jurisdiction. The Company shall consult with its own advisors concerning such matters and
shall be responsible for making their own independent investigation and appraisal of the
transactions contemplated hereby, and the Initial Purchasers shall have no responsibility or
liability to the Company with respect thereto. Any review by the Initial Purchasers of the
Company, the transactions contemplated hereby or other matters relating to such transactions will
be performed solely for the benefit of the Initial Purchasers and shall not be on behalf of the
Company.

2. Terms of the Offering. The Company understands that the Initial Purchasers intend (i) to
offer privately pursuant to Rule 144A under the Securities Act their respective portions of the
Securities as soon after this Agreement has become effective as in the judgment of the Initial
Purchasers is advisable and (ii) initially to offer the Securities upon the terms set forth in the
Final Memorandum.

The Company confirms that it has authorized the Initial Purchasers, subject to the
restrictions set forth below, to distribute copies of the Offering Memorandum in connection with
the offering of the Securities. Each Initial Purchaser hereby severally makes to the Company the
following representations and agreements:

(i) it is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act;

(ii) offers and sales of the Securities will be made only by it or its affiliates
thereof qualified to do so in the jurisdictions in which such offers or sales are made;
and

(iii) (A) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer to sell, the Securities by means of any form of general solicitation
or general advertising (as those terms are used in Regulation D under the Securities Act
(“Regulation D”)) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act and (B) it has solicited and will solicit offers for
the Securities only from, and has offered or sold and will offer, sell or deliver the
Securities only to persons who it reasonably believes to be “qualified institutional
buyers” within the meaning of Rule 144A under the Securities Act that in purchasing the
Securities are deemed to have represented and agreed as provided in the Offering
Memorandum.

With respect to offers and sales of the Securities to “qualified institutional buyers” within the
meaning of Rule 144A, as described in clause (iii)(B) above, each Initial Purchaser hereby
represents and agrees with the Company that prior to or contemporaneously with the purchase of the
Securities, the Initial Purchaser will take reasonable steps to inform, and cause each of its
affiliates to take responsible steps to inform, persons acquiring Securities from such Initial
Purchaser or affiliate, as the case may be, or other person acquiring Securities from such Initial
Purchaser or affiliate, as the case may be, that the Securities (A) are being sold to them in
reliance on Rule 144A under the Securities Act, (B) have not been and, except as described in the
Offering Memorandum, will not be registered under the Securities Act, and (C) may not be offered,
sold or otherwise transferred except as described in the Offering Memorandum.

3. Payment for Securities. Payment for the Firm Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery of such Firm
Securities for the account of the several Initial Purchasers at 10:00 a.m., New York City time, on
June 26, 2006 or at such other time on the same or such other date, not later than July 3, 2006, as
shall be designated in writing by you. The time and date of such payment are hereinafter referred
to as the “Closing Date.”

Payment for any Additional Securities shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such Additional Securities for the
account of the several Initial Purchasers at 10:00 a.m., New York City time, on the date specified
in the notice described in Section 1 or at such other time on the same or on such other date, not
later than July 11, 2006, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the “Option Closing Date.”

Certificates for the Firm Securities and Additional Securities shall be in definitive form or
global form, as specified by you, and registered in such names and in such denominations as you
shall request in writing not later than one (1) full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm Securities and
Additional Securities shall be delivered to you on the Closing Date or the Option Closing Date, as
the case may be, for the account of the several Initial Purchasers, with any transfer taxes payable
in connection with the transfer of the Securities to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor plus accrued interest, if any, to the date of payment and
delivery.

4. Representations and Warranties. The Company represents and warrants to the Initial
Purchasers that:

(a) the Preliminary Memorandum did not, as of its date, the Time of Sale Information,
did not, as of the Time of Sale, and the Final Memorandum did not, as of its date, and
will not, as of the Closing Date, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information relating to any Initial Purchaser
furnished to the Company in writing by such Initial Purchaser through you expressly for
use therein;

(b) the documents incorporated by reference in the Time of Sale Information and the
Final Memorandum, when they were filed with the Securities and Exchange Commission (the
“Commission”), conformed in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended and the applicable rules and regulations of the
Commission thereunder (the “Exchange Act”), and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by reference in the Final
Memorandum, when such documents are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act, and will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading;

(c) the financial statements, and the related notes thereto, of the Company included
or incorporated by reference in the Time of Sale Information and the Final Memorandum
present fairly, in all material respects, the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the results of
their operations and the changes in their consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with United
States generally accepted accounting principles and practices applied on a consistent
basis, except as described in the notes to such financial statements; and the supporting
schedules incorporated by reference in the Time of Sale Information and the Final
Memorandum present fairly the information required to be stated therein; and the other
financial and statistical information and any other financial data set forth in the Time
of Sale Information and the Final Memorandum present fairly, in all material respects, the
information purported to be shown thereby at the respective dates or for the respective
periods to which they apply and, to the extent that such information is set forth in or
has been derived from the financial statements and accounting books and records of the
Company, have been prepared on a basis consistent with such financial statements and the
books and records of the Company;

(d) since the respective dates as of which information is given in the Time of Sale
Information and the Final Memorandum, there has not been any material change in the
capital stock or material increase in long-term debt of the Company and its subsidiaries
taken as a whole (other than floor plan borrowings in the ordinary course of business), or
any issuance of any options, warrants, convertible securities or rights to purchase
capital stock of the Company (other than for the issuance of options of the Company under
the Company’s stock option and other similar officer, director or employee benefit plans
existing on or prior to the date of this Agreement), or any material adverse change, or
any development involving a prospective material adverse change, in or affecting the
business, financial position, stockholders’ equity or results of operations of the Company
and its subsidiaries, taken as a whole (a “Material Adverse Effect”), otherwise than as
set forth or contemplated in the Time of Sale Information and the Final Memorandum; except
as set forth or incorporated by reference or contemplated in the Time of Sale Information
and the Final Memorandum, since January 1, 2006 the Company has not declared or paid any
dividends or made any distribution of any kind with respect to its capital stock; and
except as set forth, incorporated by reference or contemplated in the Time of Sale
Information and the Final Memorandum, since the filing of the Company’s Quarterly Report
on Form 10-Q for the three months ended March 31, 2006 neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether or not in the ordinary
course of business) material to the Company and its subsidiaries, taken as a whole;

(e) the Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as described in the Time of Sale
Information and the Final Memorandum, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so as to
require such qualification, except where the failure to be so qualified or in good
standing would not have a material adverse effect on the ability of the Company and its
subsidiaries taken as a whole to own or lease their properties or conduct their businesses
as described in the Time of Sale Information and the Final Memorandum;

(f) each of the Company’s subsidiaries has been duly incorporated or organized, as
the case may be, and is validly existing as a corporation, limited liability company or
partnership, as the case may be, in good standing under the laws of its jurisdiction of
incorporation or organization and has been duly qualified as a foreign corporation,
limited liability company or partnership for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or leases properties or
conducts any business, so as to require such qualification, except where the failure to be
so qualified or in good standing would not have a material adverse effect on the ability
of the Company and its subsidiaries taken as a whole to own or lease their properties or
conduct their businesses as described in the Time of Sale Information and the Final
Memorandum; and all the outstanding shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable, are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities and claims, except as disclosed in the Time of Sale
Information and Final Memorandum or where any failure of the capital stock of any
subsidiary of the Company to be duly and validly authorized and issued, fully paid and non
assessable, or owned directly or indirectly or free and clear of all liens, encumbrances,
security interests, equities or claims would not have a Material Adverse Effect;

(g) this Agreement has been duly authorized, executed and delivered by the Company;

(h) the Company had, at the date indicated in the Time of Sale Information and the
Final Memorandum, duly authorized capital stock as set forth in the Time of Sale
Information and the Final Memorandum under the caption “Capitalization” and such
authorized capital stock of the Company conforms as to legal matters in all material
respects to the description thereof contained in the Time of Sale Information and the
Final Memorandum; there are no outstanding options to purchase, or any rights or warrants
to subscribe for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital stock of
any subsidiary, or any such warrants, convertible securities or obligations, except as set
forth in the Time of Sale Information and the Final Memorandum and except for options
granted under, or contracts or commitments pursuant to, the Company’s previous or
currently existing stock option and other similar officer, director or employee benefit
plans; except for this Agreement and the Registration Rights Agreement or stock purchase
plans, there are no contracts, commitments, agreements, arrangements, understandings or
undertakings of any kind to which the Company is a party, or by which it is bound,
granting to any person the right to require either the Company to file a registration
statement under the Securities Act with respect to any securities of the Company or
requiring the Company to include such securities with the Securities registered pursuant
to any registration statement;

(i) all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non assessable;

(j) the Securities have been duly authorized by the Company, and when duly executed,
authenticated, issued and delivered as provided in the Indenture (assuming due
authentication of the Securities by the Trustee) and paid for as provided herein will
constitute valid and binding obligations of the Company, enforceable against it in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, law relating to fraudulent conveyance, moratorium and laws of general
applicability relating to or affecting creditors’ rights and general equity principles;
and the Securities will conform, in all material respects, to the descriptions thereof in
the Time of Sale Information and the Final Memorandum;

(k) the Indenture has been duly authorized by the Company, and when executed and
delivered by the Company (assuming the authorization, execution and delivery by the
Trustee), will be a valid and binding instrument of the Company, enforceable against it in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, law relating to fraudulent conveyance, moratorium and laws of general
applicability relating to or affecting creditors’ rights and general equity principles;
and the Indenture will conform, in all material respects, to the description thereof in
the Time of Sale Information and the Final Memorandum;

(l) upon issuance and delivery of the Securities in accordance with the Agreement and
the Indenture, the Securities will be convertible at the option of the holder thereof into
 shares of the Underlying Securities in accordance with the terms of the Securities; the
Underlying Securities reserved for issuance upon conversion of the Securities have been
duly authorized and reserved and, when issued upon conversion of the Securities in
accordance with the terms of the Securities, will be validly issued, fully paid and
non-assessable, and the issuance of the Underlying Securities will not be subject to any
preemptive or similar rights.

(m) the Registration Rights Agreement has been duly authorized by the Company and
when executed and delivered by the Company (assuming the due authorization, execution and
delivery thereof by the Initial Purchasers), shall constitute the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms, subject as
to enforcement, to bankruptcy, insolvency, reorganization, law relating to fraudulent
conveyance, moratorium and laws of general applicability relating to or affecting
creditors’ rights and general equity principles; and except that rights to indemnification
and contribution thereunder may be limited by federal or state securities laws or public
policy relating thereto; and the Registration Rights Agreement conforms, in all material
respects, to the description thereof in the Time of Sale Information and the Final
Memorandum;

(n) except as disclosed in the Time of Sale Information and Final Memorandum, neither
the Company nor any of its subsidiaries is (i) in violation of its Certificate of
Incorporation, Bylaws or other organizational documents or (ii) in default in the
performance or observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its properties may
be bound, except where such default would not individually or in the aggregate have a
Material Adverse Effect. The issue and sale of the Securities and the issuance by the
Company of the Underlying Securities upon conversion of the Securities and the compliance
by the Company with all of the provisions of the Securities, the Indenture, the
Registration Rights Agreement and this Agreement, and the consummation of the transactions
herein and therein contemplated, will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries under, any Dealer Agreement (hereinafter defined) or any
indenture, mortgage, deed of trust, loan agreement, or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, (ii) violate the provisions of the Restated Certificate of
Incorporation or Bylaws of the Company, (iii) violate any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or (iv) the organizational
documents of any of its subsidiaries, except, in the cases of clause (i), (iii) or (iv),
for such conflicts, breaches, violations, or defaults as would not individually or in the
aggregate have a Material Adverse Effect; and except as disclosed in the Time of Sale
Information and Final Memorandum no consent, approval, authorization, order, registration
or qualification of or with either (x) any such court or governmental agency or body or
(y) any automobile manufacturer is required for the issue and sale of the Securities or
the consummation by the Company of the transactions contemplated by this Agreement, the
Registration Rights Agreement or the Indenture, except for (A) the filing of a
registration statement by the Company with the Commission pursuant to the Securities Act
and (B) such as have been, or will have been prior to the Closing Date, obtained and such
consents, approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and distribution
of the Securities by the Initial Purchasers and except for such consents the failure to
obtain would not have a Material Adverse Effect;

(o) other than as set forth in the Time of Sale Information and the Final Memorandum,
there are no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its subsidiaries
is the subject which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse Effect; and, to the best of
the Company’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;

(p) neither the Company, nor any affiliate (as defined in Rule 501(b) of
Regulation D) of the Company has directly, or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as defined in
the Securities Act) which is or will be integrated with the sale of the Securities in a
manner that would require the registration under the Securities Act of the offering
contemplated by the Time of Sale Information and the Final Memorandum;

(q) none of the Company, any affiliate of the Company or any person acting on its or
their behalf has offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities Act;

(r) the Securities satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act;

(s) no registration of the Securities or the Underlying Securities under the
Securities Act, and no qualification of an indenture under the Trust Indenture Act of
1939, as amended (the “TIA”) with respect thereto, is required for the offer, sale and
initial resale of the Securities by the Initial Purchasers in the manner contemplated by
this Agreement, the Time of Sale Information and the Final Memorandum;

(t) the Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Time of Sale
Information and the Final Memorandum, will not be required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as amended;

(u) Ernst & Young LLP, who have certified the consolidated financial statements of
the Company, are independent public accountants as required under the Securities Act;

(v) Arthur Andersen LLP, who have certified certain financial statements of the
Company, were independent public accountants during all relevant periods of their
engagement by the Company as required under the Securities Act;

(w) the Company and its subsidiaries have obtained all environmental permits,
licenses and other authorizations required by Federal, state and local law in order to
conduct their businesses as described in the Time of Sale Information and Final
Memorandum, except where failure to do so would not have a Material Adverse Effect; except
as described in the Time of Sale Information and Final Memorandum, the Company and its
subsidiaries are conducting their businesses in compliance with such permits, licenses and
authorizations and with applicable environmental laws, except where the failure to be in
compliance would not, individually or in the aggregate, have a Material Adverse Effect;
and, except as described in the Time of Sale Information and Final Memorandum, neither the
Company nor any of its subsidiaries is in violation of any Federal or state law or
regulation relating to the storage, handling, disposal, release or transportation of
hazardous or toxic materials, which violation would have a Material Adverse Effect;

(x) the Company and its subsidiaries have all licenses, franchises, permits,
authorizations, approvals and orders of and from all governmental and regulatory
authorities that are necessary to own or lease and operate their properties and conduct
their businesses as described in the Time of Sale Information and the Final Memorandum
except for such licenses, franchises, permits, authorizations, approvals and orders, the
failure to obtain which would not, individually or in the aggregate, have a Material
Adverse Effect;

(y) the Company and its subsidiaries have good and indefeasible title to all real
property and good and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as are described in
the Time of Sale Information and the Final Memorandum or would not have a Material Adverse
Effect; and any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases with such
exceptions as would not have a Material Adverse Effect, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors’ rights and to general equity
principles;

(z)(i) the Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management’s general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences, and (ii) the
Company maintains a system of “disclosure controls and procedures” (as such term is
defined in Rule 13a-14(c) under the Exchange Act);

(aa) the Company and each of its subsidiaries is conducting its business in
compliance with all applicable statutes, rules, regulations, standards, guides and orders
administered or issued by any governmental or regulatory authority in the jurisdictions in
which it is conducting business, except as described in the Time of Sale Information and
Final Memorandum and except where the failure to be so in compliance would not,
individually or in the aggregate, have a Material Adverse Effect; and

(bb) except as described in the Time of Sale Information and Final Memorandum, the
Company or, if applicable, a subsidiary of the Company, has entered into a dealer
agreement with each of the manufacturers listed on Schedule III hereto (collectively, the
“Dealer Agreements”), each of which has been duly authorized, executed and delivered by
the Company or the applicable subsidiary, is in full force and effect and constitutes the
valid and binding agreement between the parties thereto, enforceable in accordance with
its terms, subject to applicable Federal and state franchise laws except as would not have
a Material Adverse Effect; except as would not have a Material Adverse Effect, the Company
or the applicable subsidiaries are in compliance with all terms and conditions of the
Dealer Agreements, and, to the best knowledge of the Company, there has not occurred any
default under any of the Dealer Agreements or any event that with the giving of notice or
the lapse of time would constitute a default thereunder.

5. Covenants of the Company. The Company covenants and agrees with each of the several
Initial Purchasers as follows:

(a) the Company will deliver to the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum (including all amendments and supplements
thereto) as the Initial Purchasers may reasonably request;

(b) before distributing any amendment or supplement to the Time of Sale Information
or the Final Memorandum, the Company will furnish to the Initial Purchasers a copy of the
proposed amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchasers reasonably object;

(c) if, at any time prior to the completion of the initial placement of the
Securities by the Initial Purchasers, any event shall occur as a result of which it is
necessary in the opinion of the Initial Purchasers to amend or supplement the Time of Sale
Information or the Final Memorandum in order that the Time of Sale Information or the
Final Memorandum will not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances when the Time of Sale Information or the Final Memorandum is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the Time of Sale
Information or the Final Memorandum to comply with law, the Company will forthwith prepare
and furnish, at the expense of the Company, to the Initial Purchasers and to the dealers
(whose names and addresses the Initial Purchasers will furnish to the Company) to which
Securities may have been sold by the Initial Purchasers on behalf of the Initial
Purchasers and to any other dealers upon request, such amendments or supplements to the
Time of Sale Information or the Final Memorandum as may be necessary to correct such
untrue statement or omission or so that the statements in the Time of Sale Information or
the Final Memorandum as so amended or supplemented will comply with applicable law;

(d) the Company will endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers shall
reasonably request and to continue such qualification in effect so long as reasonably
required for distribution of the Securities and to pay all fees and expenses (including
fees and disbursements of counsel to the Initial Purchasers) reasonably incurred in
connection with such qualification and in connection with the determination of the
eligibility of the Securities for investment under the laws of such jurisdictions as the
Initial Purchasers may designate; provided that the Company shall not be required to file
a general consent to service of process in any jurisdiction or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified;

(e) without the prior written consent of J.P. Morgan Securities Inc., the Company
will not, during the period ending 90 days after the date of the Final Memorandum (the
“Lock-up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common Stock or
(iii) file with the Commission a registration statement under the Securities Act relating
to any additional shares of its Common Stock or securities convertible into, or
exchangeable for, any shares of its Common Stock, or publicly disclose the intention to
effect any transaction described in clause (i), (ii) or (iii), whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise; provided that the foregoing shall
not apply to (A) the sale of the Securities under this Agreement or the issuance of the
Underlying Securities, (B) any grant or issuance of any stock options, restricted stock or
other awards, any issuance of shares of Common Stock of the Company upon the exercise of
options granted under, and any vesting of or removal or lapse of restrictions on
restricted stock or other awards under existing employee benefits plans or agreements, (C)
any transfer of shares of Common Stock pursuant to the Company’s 401(k) plan, (D) the
filing by the Company of any registration statement with the Commission on Form S-8
relating to the offering of securities pursuant to the terms of the existing employee
benefit plans or agreements, (E) shares of Common Stock (or options, warrants or
convertible securities in respect thereof) issued in connection with a bona fide merger or
acquisition transaction, provided that the Common Stock (or options, warrants or
convertible securities in respect thereof) so issued is subject to the terms of a
duplicative form of the “lock-up agreement” set forth in Exhibit A attached hereto, (F)
the conversion of a security outstanding on the date hereof, (G)  the convertible note
hedge and warrant transactions executed by the Company concurrently with the pricing of
the Securities and (H) filing of any registration statement in respect of the Securities
and the Underlying Securities. Notwithstanding the foregoing, if (1) during the last 17
days of the 90-day restricted period, the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the expiration of
the 90-day restricted period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the 90-day period, the restrictions
imposed by this Agreement shall continue to apply until the expiration of the 18 day
period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.

(f) the Company will use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the Time of Sale
Information and the Final Memorandum under the caption “Use of proceeds”;

(g) the Company will use its reasonable best efforts to have the Underlying
Securities listed on the New York Stock Exchange;

(h) during the period from the Closing Date until two years after the Closing Date,
or the Option Closing Date, if applicable, without the prior written consent of the
Initial Purchasers, the Company will not, and will not permit any of its “affiliates” (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities or
Underlying Securities which constitute “restricted securities” under Rule 144 that have
been reacquired by any of them;

(i) whether or not the transactions contemplated in this Agreement are consummated or
this Agreement is terminated, the Company will pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder, including without
limiting the generality of the foregoing, all fees, costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the Securities, including
any expenses of the Trustee, (ii) incident to the preparation, printing and distribution
of the Preliminary Memorandum, Time of Sale Information and the Final Memorandum
(including in each case all exhibits, amendments and supplements thereto), (iii) incurred
in connection with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the Initial
Purchasers may designate (including fees of counsel for the Initial Purchasers and their
disbursements), (iv) in connection with the admission for trading of the Securities on any
securities exchange or inter-dealer quotation system (as well as in connection with the
admission of the Securities for trading in the Private Offerings, Resales and Trading
through Automatic Linkages (“PORTAL”) system of the National Association of Securities
Dealers, Inc. or any appropriate market system), (v) related to any filing with the
National Association of Securities Dealers, Inc., (vi) in connection with the printing
(including word processing and duplication costs) and delivery of this Agreement, the
Indenture, the Preliminary and Supplemental Blue Sky Memoranda and any Legal Investment
Survey and the furnishing to Initial Purchasers and dealers of copies of the Preliminary
Memorandum and the Final Memorandum, including mailing and shipping, as herein provided,
(vii) payable to rating agencies in connection with the rating of the Securities, (viii)
in connection with the listing of the Underlying Securities on the New York Stock
Exchange, and (ix) any expenses incurred by the Company in connection with a “road show”
presentation to potential investors (it being understood that, except as expressly set
forth in this Section 5(i) and elsewhere in this Agreement (including, but not limited to,
Sections 7 and 10 hereof), the Company shall have no obligation to pay any costs and
expenses of the Initial Purchasers); provided that notwithstanding the foregoing, the
Initial Purchasers agree, subject to the completion of the purchase and sale of the Firm
Securities hereunder, to reimburse the Company for up to 0.125% of the aggregate principal
amount of Securities sold to the Initial Purchasers for the Company’s documented
out-of-pocket expenses incurred in connection with the transactions contemplated hereby;

(j) while the Securities remain outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any
period in which it is not subject to Section 13 or 15(d) under the Exchange Act, make
available to the purchasers and any holder of Securities in connection with any sale
thereof and any prospective purchaser of Securities and securities analysts, in each case
upon request, the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Securities Act (or any successor thereto);

(k) the Company will not take any action prohibited by Regulation M under the
Exchange Act, in connection with the distribution of the Securities contemplated hereby;

(l) none of the Company, any of its affiliates (as defined in Rule 501(b) under the
Securities Act) or any person acting on behalf of the Company or such affiliate will
solicit any offer to buy or offer or sell the Securities or the Underlying Securities by
means of any form of general solicitation or general advertising within the meaning of
Regulation D, including: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast over television or
radio; and (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising;

(m) none of the Company, any of its affiliates (as defined in Rule 501(b) under the
Securities Act) or any person acting on behalf of the Company or such affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) which will be integrated with the sale of the
Securities or the Underlying Securities in a manner which would require the registration
under the Securities Act of the Securities or Underlying Securities, and the Company will
take all action that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the Securities Act with the offering
contemplated hereby;

(n) prior to any registration of the Securities pursuant to the Registration Rights
Agreement, or at such earlier time as may be so required, to qualify the Indenture under
the TIA, and to enter into any necessary supplemental indentures in connection therewith;

(o) the Company will use its best efforts to cause the Securities to be eligible for
trading on PORTAL; and

(p) the Company will reserve and keep available at all times, free of pre-emptive
rights, shares of Common Stock for the purpose of enabling the Company to satisfy all
obligations to issue the Underlying Securities upon conversion of the Securities.

6. Conditions to the Initial Purchasers’ Obligations. The several obligations of the Initial
Purchasers hereunder to purchase the Firm Securities on the Closing Date are subject to the
performance by the Company of its obligations hereunder and to the following additional conditions:

(a) the representations and warranties of the Company contained herein are true and
correct on and as of the Closing Date as if made on and as of the Closing Date and the
Company shall have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;

(b) since the respective dates as of which information is given in the Time of Sale
Information and the Final Memorandum (excluding any amendment or supplement thereto after
the date hereof), there shall not have been (i) any material change in the capital stock
or long-term debt (other than the changes in floor plan borrowings in the ordinary course
of business) of the Company or any of the subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or affecting the
business, its financial condition, management or results of operations of the Company and
its subsidiaries, taken as a whole, otherwise than as set forth in the Time of Sale
Information and the Final Memorandum; or (ii) any suspension or material limitation of
trading in the capital stock of the Company on the New York Stock Exchange, the effect of
which in the judgment of the Initial Purchasers makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the Closing Date on the
terms and in the manner contemplated in the Time of Sale Information and the Final
Memorandum;

(c) the Initial Purchasers shall have received on and as of the Closing Date a
certificate of an executive officer of the Company, with specific knowledge about the
Company’s financial matters, satisfactory to the Initial Purchasers to the effect set
forth in Section 6(a) and to the further effect that there has not occurred any material
adverse change, or any development involving a prospective material adverse change, in or
affecting the business, financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of
Sale Information and the Final Memorandum;

(d) Vinson & Elkins L.L.P., outside counsel for the Company, shall have furnished to
the Initial Purchasers their written opinion, dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that:

(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Time of Sale Information and the Final Memorandum;

(ii) this Agreement has been duly authorized, executed and delivered by the
Company;

(iii) the Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and, assuming the due authorization, execution and
delivery of the other parties thereto, constitutes a valid and legally binding
instrument of the Company, enforceable against it in accordance with its terms
subject, as to enforcement, to bankruptcy, insolvency, reorganization, laws
relating to fraudulent conveyance and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles (such
opinion may state that counsel expresses no opinion as to the enforceability of
any rights to indemnification or contribution that may be violative of the public
policy underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation));

(iv) the Company’s authorized capital stock as set forth in the Time of Sale
Information and the Final Memorandum;

(v) The Securities have been duly authorized, executed, issued and delivered
by the Company and, assuming the due authentication of the Securities by the
Trustee, constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indenture, enforceable against it in accordance
with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, law relating to fraudulent conveyance, moratorium and laws of
general applicability relating to or affecting creditors’ rights and general
equity principles and except as set forth in the Final Memorandum;

(vi) the Underlying Securities reserved for issuance upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities, will
be validly issued, fully paid and non-assessable and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights
under the Company’s Restated Certificate of Incorporation or Bylaws or under the
Delaware General Corporation Law;

(vii) the Indenture has been duly authorized, executed and delivered by the
Company and, assuming the due authorization, execution and delivery of the other
parties thereto, constitutes a valid and legally binding instrument of the
Company, enforceable against it in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, laws relating to
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors’ rights and to general equity principles;

(viii) no consent, approval, authorization, order, registration or
qualification of or with any such Texas or federal court or governmental agency
or body described in subparagraph (c) of paragraph (xiii) below is required for
the issue and sale of the Securities, the issuance by the Company of the
Underlying Securities upon conversion of the Securities or the consummation by
the Company of the transactions contemplated by this Agreement, the Indenture or
the Registration Rights Agreement, except (A) the order of the Commission
declaring the shelf registration statement required to be filed under the
Registration Rights Agreement effective and (B) such as have been obtained and
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or blue sky laws in connection with the
purchase and distribution of the Securities by the Initial Purchasers and except
where failure to obtain such consent, approval, authorization, order,
registration or qualification would not have a Material Adverse Effect (such
counsel need express no opinion in this subparagraph (viii) as to compliance with
the registration provisions of the Securities Act in relation to the Securities);

(ix) no registration of the Securities or the Underlying Securities under
the Securities Act, and no qualification of an indenture under the TIA with
respect thereto, is required for the offer, sale and initial resale of the
Securities by the Initial Purchasers in the manner contemplated by this
Agreement, the Time of Sale Information and the Final Memorandum;

(x) the Company is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Time of Sale Information and the Final Memorandum, will not be required to
register as an “investment company” as defined in the Investment Company Act of
1940, as amended;

(xi) when the Securities are issued and delivered pursuant to this
Agreement, none of the Securities will be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system;

(xii) the statements in the Time of Sale Information and the Final
Memorandum under the captions “Description of notes,” “Description of capital
stock”, “Registration rights,” and “Certain United States federal income tax
considerations”, insofar as they constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present, in all material
respects, the information called for with respect to such legal matters,
documents or proceedings;

(xiii) the issue and sale of the Securities, the issuance by the Company of
the Underlying Securities upon conversion of the Securities, and the compliance
by the Company with all of the provisions of the Securities, Indenture,
Registration Rights Agreement and this Agreement with respect to the Securities
and the consummation of the transactions contemplated herein will not
(a) conflict with or result in a breach or violation of any document or agreement
filed as an exhibit to the Company’s annual report on Form 10-K for the year
ended December 31, 2005, (b) result in any violation of the provisions of the
Restated Certificate of Incorporation or Bylaws of the Company or (c) result in a
violation of any Texas or federal statute or any order, rule or regulation known
to such counsel of any Texas or federal court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
properties (except that such counsel need express no opinion with respect to
compliance with the anti-fraud provisions of Federal or state securities laws or
Blue Sky laws with respect to this paragraph), except in the case of clauses (a)
and (c) for such breaches or violations that could not reasonably be expected to
have a Material Adverse Effect or that could violate public policy relating
thereto;

(xiv) each document incorporated by reference in the Time of Sale
Information and the Final Memorandum (other than the financial statements,
including the notes thereto, and financial statement schedules and other
financial and accounting information included therein, as to which such counsel
need express no opinion), when they became effective or were filed with the
Commission, as the case may be, appear on their face to be appropriately
responsive in all material respects to the requirements of the Exchange Act; and

(xv) no facts have come to such counsel’s attention that have led such
counsel to believe that (except for the financial statements and related
schedules, including the notes and schedules thereto and the auditor’s report
thereon or any other financial or accounting data included in, or excluded from,
the Time of Sale Information or the Final Memorandum as to which such counsel
need express no belief) (x) the Time of Sale Information, as of the Time of
Sale, contained an untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (y) the Final
Memorandum, as of its date or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

(e) Corporate Counsel of the Company, shall have furnished to the Initial Purchasers
his written opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers, to the effect that:

(i) the Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification, other than where the failure to be so qualified
or in good standing would not have a Material Adverse Effect;

(ii) the shares of Common Stock outstanding on the Closing Date have been
duly authorized and are validly issued, fully paid and non-assessable;

(iii) each subsidiary of the Company that is organized in the state of
Delaware or Texas has been duly incorporated or formed and is validly existing as
a corporation, limited liability company, or limited partnership in good standing
under the laws of the state of its incorporation or formation with power and
authority (corporate and other) to own its properties and conduct its business in
the Time of Sale Information and the Final Memorandum;

(iv) to such counsel’s knowledge, other than as set forth, incorporated by
reference or contemplated in the Time of Sale Information and the Final
Memorandum, there are no legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or its subsidiaries is or may be the subject which,
if determined adversely to the Company or such subsidiaries, could individually
or in the aggregate reasonably be expected to have a Material Adverse Effect.

(f) on the date of the issuance of the Final Memorandum and also on the Closing Date,
Ernst & Young LLP shall have furnished to the Initial Purchasers letters, dated the
respective dates of delivery thereof, in form and substance reasonably satisfactory to
you, containing statements and information of the type customarily included in accountants
“comfort letters” to underwriters with respect to the financial statements and certain
financial information contained in the Offering Memorandum;

(g) the Initial Purchasers shall have received on and as of the Closing Date an
opinion of Davis Polk & Wardwell, counsel to the Initial Purchasers, in form and substance
reasonably satisfactory to you.

(h) the “lock-up” agreements, each substantially in the form of Exhibit A hereto,
between you and the officers and directors of the Company identified on Exhibit A-1
relating to sales and certain other dispositions of shares of Common Stock or certain
other securities, delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.

(i) an application for the listing of the Underlying Securities shall have been
submitted to the New York Stock Exchange.

(j) the Securities shall have been approved for trading on PORTAL, subject only to
notice of issuance at or prior to the time of purchase.

(k) on or prior to the Closing Date the Company shall have furnished to the Initial
Purchasers such further certificates and documents as the Initial Purchasers or their
counsel shall reasonably request.

The obligations of the Initial Purchasers to purchase Additional Securities hereunder are
subject to the delivery to you on the Option Closing Date of such documents as you may reasonably
request including with respect to the good standing of the Company, the due authorization,
execution, authentication and issuance of the Additional Securities and other matters related to
the execution, authentication and issuance of the Additional Securities.

7. Indemnity and Contribution. The Company agrees to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls an Initial Purchaser within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim asserted) caused
by any untrue statement or alleged untrue statement of a material fact contained in the Preliminary
Memorandum (and any amendment or supplement thereto), the Time of Sale Information or the Final
Memorandum (and any amendment or supplement thereto if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged omission to state therein
a material fact or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information relating to any Initial Purchaser
furnished to the Company in writing by such Initial Purchaser through you expressly for use
therein.

Each Initial Purchaser agrees, severally and not jointly to indemnify and hold harmless the
Company and its directors, its officers and each person who controls the Company within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Initial Purchaser, but only with reference to
information relating to such Initial Purchaser furnished to the Company in writing by such Initial
Purchaser expressly for use in the Preliminary Memorandum, the Time of Sale Information and the
Final Memorandum or any amendment or supplement thereto.

If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any person in respect of which indemnity may
be sought pursuant to either of the two preceding paragraphs, such person (the “Indemnified
Person”) shall promptly notify the person against whom such indemnity may be sought (the
“Indemnifying Person”) in writing, and the Indemnifying Person, upon request of the Indemnified
Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding. In any such
proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory
to the Indemnified Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred.
Any such separate firm for the Initial Purchasers and such control persons of the Initial
Purchasers shall be designated in writing by J.P. Morgan Securities Inc. and any such separate firm
for the Company, its directors, its officers and such control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.
No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect
any settlement of any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such Indemnified Person from
all liability on claims that are the subject matter of such proceeding on terms reasonably
satisfactory to such Indemnified Person.

If the indemnification provided for in the first and second paragraphs of this Section 7 is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial Purchasers on the other in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchasers on the other shall be deemed to
be in the same respective proportions as the net proceeds from the offering of such Securities
(before deducting expenses) received by the Company and the total discounts and commissions
received by the Initial Purchasers bear to the aggregate offering price of the Securities. The
relative fault of the Company on the one hand and the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.

The Company and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial Purchaser be
required to contribute any amount in excess of the amount by which the total price at which the
Securities purchased by it were offered exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to
contribute pursuant to this Section 7 are several in proportion to the respective principal amount
of the Securities set forth opposite their names in Schedule I hereto, and not joint.

The remedies provided for in this Section 7 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or in equity.

The indemnity and contribution agreements contained in this Section 7 and the representations
and warranties of the Company set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or
on behalf of any Initial Purchaser or any person controlling any Initial Purchaser or by or on
behalf of the Company, its officers or directors or any other person controlling the Company and
(iii) acceptance of and payment for any of the Securities.

8. Termination. Notwithstanding anything herein contained, this Agreement may be terminated
in the absolute discretion of the Initial Purchasers, by notice given to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any of the New York Stock
Exchange or the National Association of Securities Dealers, Inc., (ii) trading of any securities of
or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Initial Purchasers, is material and adverse and which, in the judgment
of the Initial Purchasers, makes it impracticable to offer, sell or deliver the Securities on the
terms and in the manner contemplated in the Time of Sale Information or the Final Memorandum or to
enforce contracts for the sale of the Securities.

9. Effectiveness Defaulting Initial Purchasers. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto.

If, on the Closing Date any one or more of the Initial Purchasers shall fail or refuse to
purchase Securities which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of the Securities to be purchased on such date, the other Initial Purchasers shall
be obligated severally in the proportions that the principal amount of Securities set forth
opposite their respective names in Schedule I (in the column titled “Total”) bears to the aggregate
principal amount of Securities set forth opposite the names of all such non-defaulting Initial
Purchasers (in the column titled “Total”), or in such other proportions as the Initial Purchasers
may specify, to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Initial Purchaser has agreed to purchase pursuant to
Section 1 be increased pursuant to this Section 9 by an amount in excess of one-tenth of such
principal amount of Securities without the written consent of such Initial Purchaser. If, on the
Closing Date any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Securities which it or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and arrangements
satisfactory to the Initial Purchasers and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Initial Purchaser or the Company. In any such case either the Initial
Purchasers or the Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the Final Memorandum or in
any other documents or arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.

10. Reimbursement. If this Agreement shall be terminated by the Initial Purchasers, or any of
them, because of any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement or if for any reason the Company shall be unable to
perform its obligations under this Agreement or any condition of the Initial Purchasers’
obligations cannot be fulfilled, the Company agrees to reimburse the Initial Purchasers or such
Initial Purchasers as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the reasonable fees and expenses of their counsel) incurred
by such Initial Purchasers in connection with this Agreement or the offering contemplated
hereunder. For the avoidance of doubt, the Initial Purchasers shall not be entitled to
reimbursement pursuant to the provisions of this Section 10 for any termination pursuant to Section
8 or 9 hereof.

11. Parties. This Agreement shall inure to the benefit of and be binding upon the Company,
the Initial Purchasers, any controlling persons referred to herein and their respective successors
and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. No purchaser of Securities from
the Initial Purchaser shall be deemed to be a successor by reason merely of such purchase.

12. Notices. Any action by the Initial Purchasers hereunder may be taken by the Representative
on behalf of the Initial Purchasers, and any such action taken by the Representative shall be
binding upon the Initial Purchasers. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Initial Purchasers shall be given to the Initial Purchasers
c/o J.P. Morgan Securities Inc., 277 Park Avenue, 9th Floor, New York, New York 10172
(telefax: (212) 622-8358); Attention: Syndicate Desk. Notices to the Company shall be given to it
at Group 1 Automotive, Inc., Attention: Vice President, Legal Counsel and Corporate Secretary, 950
Echo Lane, Suite 100, Houston, Texas 77024 (fax: (713) 647-5858).

13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

14. Counterparts. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.

1

If the foregoing is in accordance with your understanding, please sign and return four
counterparts hereof.

Very truly yours,

	 	 	 
	GROUP 1 AUTOMOTIVE, INC.
	By:

	 	/s/ John C. Rickel
	
 
	 	 
	 
	 	 
	Name: John C. Rickel

	 
	 	 
	Title: Senior Vice President and
Chief Financial Officer

The foregoing Purchase Agreement

is hereby confirmed and accepted

as of the date first above written.

J.P. MORGAN SECURITIES INC.

By: J.P. MORGAN SECURITIES, INC.

Acting on behalf of themselves

and as Representative

of the Initial Purchasers

	 	 	 
	By: /s/ Santosh Sreenivasan

	 

	Name:

Title:

	 	Santosh Sreenivasan

Vice President

2

SCHEDULE I

	 	 	 	 	 
	 	 	Principal
	 	 	Amount
	Initial Purchaser	 	of Securities
	J.P. Morgan Securities Inc.
	 	$	187,500,000	 
	Banc of America Securities LLC
	 	$	18,750,000	 
	Comerica Securities Inc.
	 	$	12,500,000	 
	Morgan Stanley & Co. Incorporated
	 	$	12,500,000	 
	Wachovia Capital Markets, LLC
	 	$	12,500,000	 
	U.S. Bancorp Investments, Inc.
	 	$	6,250,000	 
	Total
	 	$	250,000,000	 

3

SCHEDULE II

Time of Sale Information

Term Sheet dated as of June 20, 2006

4

Information Sheet dated as of June 20, 2006SCHEDULE III

Dealer Agreements

American Honda Motor Co., Inc.

American Isuzu Motors Inc.

BMW of North America, LLC

DaimlerChrysler Motors Corporation

Ford Motor Company

General Motors Corporation

Hyundai Motor America

Kia Motor America, Inc.

Mazda Motor America, Inc.

Mitsubishi Motor Sales of America, Inc.

Nissan Motor Corporation in U.S.A.

Subaru of America, Inc.

Toyota Motor Sales, U.S.A., Inc.

Volkswagen of America, Inc.

5

EXHIBIT A

[FORM OF LOCK-UP LETTER]

June 11, 2006

J.P. Morgan Securities Inc.

277 Park Avenue

9th Floor

New York, NY 10172

Dear Sirs and Mesdames:

The undersigned understands that J.P. Morgan Securities Inc. (“J.P. Morgan”) proposes to enter
into a Purchase Agreement (“Purchase Agreement”) with Group 1 Automotive, Inc., a Delaware
corporation (the “Company”), providing for the offering (the “Offering”) by the several Initial
Purchasers, including J.P. Morgan (the “Initial Purchasers”), of Convertible Senior Notes due 2036
(the “Securities”). The Securities will be convertible into shares of common stock of the Company,
par value $0.01 per share (the “Common Stock”).

To induce the Initial Purchasers that may participate in the Offering to continue their
efforts in connection with the Offering, the undersigned hereby agrees that, without the prior
written consent of J.P. Morgan on behalf of the Initial Purchasers, it will not, during the period
commencing on the date hereof and ending 45 days after the date of the Final Memorandum relating to
the Offering (the “Final Memorandum”), (1) offer, pledge, sell contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or
(2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise. Notwithstanding anything to the contrary in this Letter Agreement, the
undersigned, together with the other persons signing this form of Letter Agreement, shall be
permitted, with the prior written consent of the Chief Financial Officer or the Vice President,
Legal Counsel of the Company (the “Authorized Officers”), during such restricted period to sell (or
transfer economic rights in whole or in part to, or grant any right, warrant or option with respect
to), in the aggregate, 400,000 shares of Common Stock (subject to adjustment for stock splits,
dividends, combinations of shares or similar transactions and provided that any shares covered by
or transferred pursuant to the immediately following paragraph shall not be counted towards such
400,000 share exception).

The restrictions set forth in the immediately preceding paragraph shall not apply to (a) bona
fide gifts to charitable or nonprofit institutions, (b) transfers of Common Stock by bona fide
gift, will or intestacy, including without limitation transfers by gift, will or intestacy to
family members of the undersigned or to a settlement or trust, established under the laws of any
country for the direct or indirect benefit of the undersigned or (c) transfers or sales of Common
Stock pursuant to any contract, instruction or plan, including a contract, instruction or plan
complying with Rule 10b5-1 of the Regulations of the Securities Exchange Act of 1934, as amended,
that has been entered into by the undersigned prior to the date of this Letter Agreement, provided
that in the event of any transfer pursuant to clauses (a) or (b), the transferee shall enter into a
lock-up agreement substantially in the form of this Letter Agreement covering the remainder of the
45-day period referred to herein. Further, the restrictions set forth in the immediately preceding
paragraph shall not apply to the receipt, exercise, cashless exercise (whether to cover exercise
price or taxes), vesting or forfeiture of, or removal or lapse of restrictions on, any stock
option, common stock issued upon exercise of a stock option, restricted stock or other award
pursuant to any employee benefit plan or agreement on the date hereof. In addition, the
undersigned agrees that, without the prior written consent of J.P. Morgan on behalf of the Initial
Purchasers, it will not, during the period commencing on the date hereof and ending 45 days after
the date of the Final Memorandum, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. The undersigned hereby further agrees that, prior to engaging in
any transaction or taking any other action that is subject to the terms of this Letter Agreement
during the restricted period, it will give notice thereof to the Authorized Officers and will not
consummate such transaction or take any such action unless it has received written confirmation
from one of the Authorized Officers that such action is permitted under this Letter Agreement. The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock
except in compliance with the foregoing restrictions.

Notwithstanding the foregoing, if (1) during the last 17 days of the 45-day restricted period,
the Company issues an earnings release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 45-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last day of the 45-day
period, the restrictions imposed by this Letter Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.

6

The undersigned understands that the Company and the Initial Purchasers are relying upon this
Letter Agreement in proceeding toward consummation of the Offering. The undersigned further
understands that this Letter Agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors and assigns.

Whether or not the Offering actually occurs depends on a number of factors, including market
conditions. Any offering will only be made pursuant to a Purchase Agreement, the terms of which
are subject to negotiation between the Company and the Initial Purchasers.

Very truly yours,

(Name)

(Address)

7

EXHIBIT A-1

PERSONS SUBJECT TO LOCK-UP

	 	 	 
	Directors:

	 	John L. Adams

Earl J. Hesterberg

Robert E. Howard, II

Luis E. Laitart

Stephen D. Quinn

Max P. Watson, Jr.

Terry Strange
	 
	 	 
	Officers:

	 	Joseph C. Herman

John C. Rickel

Randy L. Callison
	 
	 	 

8

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