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EXHIBIT 10.20
[MITSUBISHI MOTOR SALES OF AMERICA, INC. LETTERHEAD]
June 20, 1997
Mr. B. B. Hollingsworth, Jr.
Group 1 Automotive, Inc.
950 Echo Lane, Suite 348
Houston, Texas 77024
RE: Beneficial Ownership
Mike Smith Autoplaza, Inc. dba Mike Smith Mitsubishi
Dear Mr. Hollingsworth:
This letter confirms that the beneficial ownership in your MMSA Dealership
Corporation is as follows:
NAME VOTING STOCK
Group 1 Automotive, Inc. 100%
You have requested that MMSA make an exception to its policy that the
controlling ownership interest in an authorized MMSA Dealer Corporation be in
the name of a natural person and not a corporation.
This letter advises you that MMSA hereby approves the above-described ownership
of Mike Smith Autoplaza, Inc. dba Mike Smith Mitsubishi, conditioned on your
agreement that so long as you are doing business as an authorized MMSA dealer
to the extent that the Dealer Agreement refers to changes in the controlling
ownership interest (i) IT SHALL BE DEEMED TO REFER TO THE OWNERSHIP OF MIKE
SMITH AUTOPLAZA, INC. AS WELL AS THE OWNERSHIP OF ANY DIRECT OR INDIRECT PARENT
COMPANY OF MIKE SMITH AUTOPLAZA, INC. AND (ii) THE TERMS OF THE ATTACHED
APPENDIX SHALL DEFINE A CHANGE IN OWNERSHIP OF ANY PUBLICLY-TRADED PARENT
COMPANY OF MIKE SMITH AUTOPLAZA, INC.
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Mr. B. B. Hollingsworth, Jr.
June 20, 1997
Page 2
If all the above is agreeable to you, please indicate your acceptance thereof
by signing the enclosed duplicate originals of this letter in the space
provided below and returning the same to us, upon which the foregoing approval
shall become effective.
Very truly yours,
N. Kevin Ormes
Group Vice President
Sales & Marketing
NKO/ash
ACCEPTED AND AGREED TO:
ON BEHALF OF MIKE SMITH AUTOPLAZA, INC.
DBA MIKE SMITH MITSUBISHI
AND GROUP 1 AUTOMOTIVE, INC.
By:
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Title:
----------------------------
Date:
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APPENDIX
CHANGE IN
MAJORITY OWNERSHIP OR CONTROL OF DEALER
The Dealer Sales and Service Agreement (the "Dealer Agreement")
between Mitsubishi Motor Sales of America, Inc. ("MMSA") and Mike Smith
Autoplaza, Inc. dba Mike Smith Mitsubishi (the "Dealer") prohibits a change of
majority ownership or control of the Dealer without the prior written approval
of MMSA, which approval will not be unreasonably withheld. The purpose of this
provision, together with the provision requiring MMSA approval for a change in
the Executive Managers of the Dealer, is to preserve the identity of the owners
and managers whose automotive industry experience, reputation and abilities
were the basis for MMSA's decision to award to the Dealer the Mitsubishi
automobile dealership. A failure to observe these provisions can result in
termination of the Dealer Agreement.
Some Mitsubishi Dealers, or one of their parent entities in a chain of
ownership, may consist of entities whose equity securities are, or will in the
future become, publicly traded. The purpose of this letter is to explain in
greater detail what constitutes a change of ownership or control of the Dealer
in that context.
For purposes of this letter, capitalized terms used herein without
definition shall have the meanings ascribed to them in the Dealer Agreement.
Additionally, the following definitions shall apply herein:
"Group" shall have the meaning contemplated in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Majority Ownership" of a Dealer or other Person shall mean
beneficial ownership or control, directly or indirectly, of either (a)
a majority of the outstanding equity securities of such Dealer or
other Person entitled to vote generally in the election of directors,
trustees or members of any other governing body of such Dealer or
other Person or (b) equity securities of such Dealer or other Person
representing a majority of all outstanding votes entitled to be cast
in the election of directors, trustees or members of any other
governing body of such Dealer or other Person.
"Parent Company" shall mean a Person holding, directly or
indirectly, Majority Ownership of the Dealer.
"Person" shall mean to any individual, corporation,
partnership, trust, or other entity.
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Mr. B. B. Hollingsworth, Jr.
June 20, 1997
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For a Dealer whose equity securities are publicly traded, and for a
Dealer having one or more Parent Companies with publicly traded equity
securities, a change of majority ownership or control of such Dealer will be
deemed to have occurred upon the happening or existence of any of the following
events or circumstances:
(a) Any Person or Group acquires Majority Ownership of the Dealer
or a Parent Company thereof after the date hereof; or
(b) During any period of two consecutive years, individuals who at
the beginning of such period constituted the board of
directors of the Dealer or any Parent Company (together with
any new directors whose election or appointment by such board
of directors or whose nomination for election by the
stockholders of such Dealer or Parent Company was approved by
a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
board of directors of the Dealer or Parent Company then in
office.
Please acknowledge your understanding of and agreement with the
foregoing by executing a copy of this letter in the space provided below and
returning such copy to Kirk Taylor, Regional Market Representation Manager.
ACKNOWLEDGED AND AGREED TO:
SIGNATURE
By: Date:
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ON BEHALF OF MIKE SMITH AUTOPLAZA, INC.
DBA MIKE SMITH MITSUBISHI
AND GROUP 1 AUTOMOTIVE, INC.