AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1998.

REGISTRATION NO. 333-51451
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 4

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

SUNBELT AUTOMOTIVE GROUP, INC.
(Exact name of registrant as specified in its charter)

GEORGIA 5511 58-2378292
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Classification Code Number) Identification No.)
Organization)

5901 PEACHTREE-DUNWOODY RD., SUITE 250-B
ATLANTA, GEORGIA 30328
(678) 443-8100
(Address and Telephone Number of Principal Executive Offices)

STEPHEN C. WHICKER, ESQ.
GENERAL COUNSEL
5901 PEACHTREE-DUNWOODY RD., SUITE 250-B
ATLANTA, GEORGIA 30328
(678) 443-8100
(Name, Address and Telephone Number of Agent for Service)
---------------------
COPIES TO:

DAVID S. COOPER, ESQ.
ROBERT B. MURPHY, ESQ.
THOMAS L. HANLEY, ESQ. JAMES L. SMITH, III, ESQ.
SCHNADER HARRISON SEGAL & LEWIS LLP TROUTMAN SANDERS LLP
SUITE 2800 / 303 PEACHTREE ST., N.E. 600 PEACHTREE STREET, N.E. / SUITE 5200
ATLANTA, GEORGIA 30308 ATLANTA, GEORGIA 30308-2216
(404) 215-8100 (404) 885-3000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED , 1998.

PROSPECTUS

5,500,000 SHARES

(SUNBELT AUTOMOTIVE GROUP LOGO)

COMMON STOCK
(PAR VALUE $0.001 PER SHARE)
------------------------
All of the shares of common stock offered hereby are being sold by Sunbelt
Automotive Group, Inc. ("Sunbelt" or the "Company"). Prior to this offering,
there has been no public market for the common stock of the Company. It is
currently estimated that the initial public offering price will be between $9.00
and $11.00 per share. See "Underwriting" for a discussion of the factors to be
considered in determining the initial public offering price of the common stock.

The Company's common stock has been approved for quotation on the Nasdaq
National Market under the symbol "SBLT", subject to notice of issuance.

Sunbelt was formed in December 1997 to acquire automobile dealerships and
related operations and has conducted limited operations to date. The Company has
not received the approval of any automobile manufacturer with respect to the
Merger or the Acquisitions described herein, except for final approval from
Hummer, contingent approval from Ford and verbal approval from several other
manufacturers. See "The Acquisitions." The failure to receive approvals from all
of the manufacturers may have a material adverse effect on the Company's
business, financial condition and results of operations.

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

SEE "RISK FACTORS" BEGINNING ON PAGE 16 FOR CERTAIN INFORMATION THAT

SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
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Per Share......................... $ $ $
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Total(3).......................... $ $ $
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(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses estimated at $ , which are payable by the
Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
additional shares of common stock on the same terms and conditions as
the common stock offered hereby solely to cover over-allotments, if any. If
the option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."
------------------------
The shares of common stock are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
other conditions, including the right of the Underwriters to withdraw, cancel,
modify or reject any order in whole or in part. It is expected that delivery of
the shares will be made on or about , 1998 at the offices of Raymond
James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida.
RAYMOND JAMES & ASSOCIATES, INC.

The date of this Prospectus is , 1998.
3

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN THE
COMMON STOCK AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
4

[DESCRIPTION OF GRAPHICS -- INSIDE FRONT COVER:
PICTURE OF GLOBE AND FOLLOWING TEXT:

THE WORLD OF AUTOMOTIVE RETAILING IS CHANGING . . .

The industry is growing . . .
up 40% over the last 5 years, to more than
$1.0 trillion in total revenues in 1997.

Sunbelt Automotive Group, Inc. believes that the opportunity exists
for industry leaders to create operating efficiencies,
and to improve customer service.]
------------------------

[DESCRIPTION OF GRAPHICS -- INSIDE FRONT COVER:
COMPANY'S LOGO AND FOLLOWING TEXT:

A WHOLE NEW WORLD OF AUTOMOTIVE RETAILING

COMPANY PROFILE:

Upon completion of this Offering, Sunbelt believes it will be one of the 13
largest dealership

groups with $688 million in revenues

Southeast automotive retailing consolidator will initially operate in four
states

Management team with automotive retailing and public company experience

Acquisition strategy focused on medium- and smaller-sized Southeast markets

Diversified revenue base: new cars (61%), used cars (26%) and other ancillary
products (13%)]
------------------------

[DESCRIPTION OF GRAPHICS -- INSIDE FRONT COVER:
COMPANY'S LOGO; MAP OF SOUTHEASTERN UNITED STATES
SHOWING COMPANY'S LOCATIONS AND FOLLOWING TEXT:

Sunbelt Automotive Group, Inc. is located in the Southeast region of the United
States.
Sunbelt will operate 31 automotive dealerships,
4 Collision Centers USA locations and
5 South Financial Corporation locations in 6 southeastern markets.]

The Company intends to furnish its shareholders with annual reports
containing financial statements audited by its independent public accountants
and will make available copies of its quarterly reports for the first three
quarters of each fiscal year.

This Prospectus includes statistical data regarding the automotive retailing
industry. Unless otherwise indicated herein, such data is taken or derived from
information published by the Industry Analysis Division of the National
Automobile Dealers Association ("NADA") in its NADA Data 1997 publication and/or
the Automotive News Market Data Book 1998.
------------------------

[DESCRIPTION OF GRAPHICS -- INSIDE BACK COVER:
EMBLEMS OF VARIOUS DEALERSHIP BRANDS OF COMPANY AND FOLLOWING TEXT:

THE SUNBELT AUTOMOTIVE GROUP BRAND PORTFOLIO
Sunbelt Automotive Group, Inc. will offer a well-diversified product
and brand portfolio with a strong mix of domestic and foreign vehicles.]

This Prospectus includes trademarks and service marks of Sunbelt, companies
other than Sunbelt, and the automobile manufacturers, which trademarks are the
property of their respective holders. No automobile manufacturer has been
involved, directly or indirectly, in the preparation of this Prospectus or in
the Offering being made hereby. No automobile manufacturer has made any
statements or representations in connection with this Offering or provided any
information or materials that were used in connection with this Offering, and no
automobile manufacturer has any responsibility for the accuracy or completeness
of this Prospectus.
------------------------
5

PROSPECTUS SUMMARY

Sunbelt Automotive Group, Inc. was formed in December 1997 to acquire
automobile dealerships and related operations and has conducted limited
operations to date. Sunbelt's current operations are limited to activities
involved in identifying potential target companies, negotiating the related
acquisition agreements, preparing for the proposed Merger and Acquisitions and
operating the companies acquired to date. Although certain members of Sunbelt's
management have significant automotive retailing industry experience, Sunbelt
has not managed the combined businesses discussed herein, and the proposed
Merger and certain of the Acquisitions will not occur until the consummation
date of this offering (the "Offering"). Accordingly, any references herein to
"Sunbelt" or the "Company" and the activities and characteristics of the
combined entities should be read as pro forma descriptions of those activities
and characteristics following the consummation of the proposed Merger and all of
the Acquisition transactions.

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information, including risk factors and
financial statements (including the notes thereto) appearing elsewhere in this
Prospectus. Unless otherwise indicated, the information in this Prospectus
assumes that (i) the Underwriters' over-allotment option has not been exercised,
and (ii) the Merger (as such term is defined herein; see "The Merger") and the
Acquisitions (as such term is defined herein; see "The Acquisitions") have
occurred. References in this Prospectus to "common stock" are to the common
stock of the Company, unless otherwise indicated or unless the context otherwise
requires. References in this Prospectus to "Sunbelt" or the "Company" (i) are to
Sunbelt Automotive Group, Inc. and, unless the context indicates otherwise, its
consolidated subsidiaries and their respective predecessors, (ii) give effect to
the Merger, and (iii) assume that the Company has consummated all of the
Acquisitions. See "The Merger" and "The Acquisitions." The Acquisitions will be
consummated on or before the closing of the Offering, and the Merger will be
consummated contemporaneously with the closing of the Offering. Investors should
carefully consider the information set forth in "Risk Factors."

THE COMPANY

Upon the consummation of the Merger and all of the Acquisitions, Sunbelt
expects to be one of the leading retailers of new and used vehicles in the
southeastern United States. The Company will operate a total of 31 dealership
franchises in Georgia, North Carolina and Tennessee, as well as four collision
repair centers in metropolitan Atlanta, Georgia. Sunbelt will sell 20 domestic
and foreign brands of automobiles, which consist of Buick, Cadillac, Chevrolet,
Chrysler, Dodge, Ford, GMC, Honda, Hummer, Isuzu, Jeep, Kia, Mazda, Mercury,
Mitsubishi, Nissan, Oldsmobile, Plymouth, Pontiac and Toyota. In 1997, based on
pro forma retail new vehicle unit sales, the Company believes it would have
ranked 13th on the Automotive News' listing of the 1997 top 100 dealer groups in
the United States. The Company intends to further diversify its product and
service offerings by adding more brands of vehicles, and by offering related
finance and insurance, replacement parts, collision repair, and other products
and services that are complementary to its core automotive retailing operations.
The Company's strategy is: (i) to become the leading operator of automotive
dealerships in small and medium-sized markets in the southeastern United States
through acquisitions of additional dealerships in these markets, and (ii) to
expand its collision centers and other complementary business operations.

The Company's executive management team has extensive experience in the
automotive retailing industry and the operation of automotive dealerships in the
southeastern United States. On average, the Company's executive officers have
over 15 years of direct industry experience. Between 1992 and 1997, the
dealerships that the Company owns or expects to acquire upon consummation of the
Offering won many awards from various manufacturers measuring quality and
customer satisfaction. These awards include: the Five Star Award from Chrysler,
which is given to the top 25% of Chrysler dealers in the nation; the NACE (North
American Customer Excellence) Award, Ford Motor Company's highest overall award
for customer service; the Top 100 Club, which is awarded to Ford's top 100
retailers or 2% of Ford dealers in the nation based on retail volume and
consumer satisfaction; the Cadillac Master Dealer award, a status achieved by 1%
of Cadillac dealers nationwide; the Oldsmobile Elite Award, which is given by
Oldsmobile Motor Division to

3
6

the top 10% of Oldsmobile dealers in the nation; and the President's Circle
Award for performance, which is given by Nissan Motor Corporation to the top 10%
of Nissan dealers in the nation.

The automotive dealerships and related businesses that will comprise the
Company upon the consummation of the Merger and the Acquisitions would have had
pro forma combined total revenues of $688 million for the year ended June 30,
1997 and $510 million for the nine months ended March 31, 1998. See "Pro Forma
Combined and Condensed Financial Data."

RISKS ASSOCIATED WITH MANUFACTURERS' APPROVALS

As of the date of this Prospectus, the Company has not received the
approval of any manufacturer with respect to the Merger or the Acquisitions
except for final approval from AM General Corporation ("Hummer"), contingent
approval from Ford and verbal approval from Chrysler, GM and Nissan, and the
Company does not expect to obtain such approvals until after the closing date of
this Offering. In the event that the Company is unable to obtain approvals for
the Merger or any of the Acquisition transactions, the Company may be forced to
divest itself of one or more dealerships or may be forced to accept conditions
imposed by the manufacturer(s) that may have a material adverse effect on the
Company's strategic plan. The failure to obtain such approvals may have a
material adverse effect on the Company's business, financial condition and
results of operations. The failure to obtain such approvals will not have an
effect on the purchase price payable by the Company in the Merger or any of the
Acquisitions.

The following tables set forth certain pro forma combined total sales
revenues and cost of goods sold information relating to the new vehicles sold by
dealerships that the Company owns or expects to acquire upon consummation of the
Offering categorized by manufacturer (dollars in thousands):

YEAR ENDED JUNE 30,
------------------------------------------------------------------
1995 1996 1997
-------------------- -------------------- --------------------
SALES % OF SALES SALES % OF SALES SALES % OF SALES
-------- ---------- -------- ---------- -------- ----------

Ford(1).................... $147,965 41.3% $176,156 43.5% $201,508 47.9%
General Motors(2).......... 114,696 32.1 111,798 27.7 98,506 23.5
Nissan..................... 41,453 11.6 44,304 11.0 44,261 10.5
Toyota..................... 17,066 4.8 22,196 5.5 17,473 4.2
Mitsubishi................. 2,369 0.7 5,989 1.5 11,013 2.6
Mazda...................... 2,073 0.6 5,288 1.3 10,469 2.5
Isuzu...................... 15,119 4.2 12,479 3.1 9,434 2.2
Chrysler/Dodge/Plymouth.... 9,574 2.7 7,920 2.0 8,717 2.1
Kia........................ -- -- 4,570 1.1 7,040 1.7
Honda...................... -- -- 6,007 1.5 6,105 1.5
Jeep/Eagle................. 2,736 0.8 3,045 0.8 3,353 0.8
Hummer..................... 1,998 0.6 2,954 0.7 2,140 0.5
Other(3)................... 2,172 0.6 1,171 0.3 -- --
-------- ------- -------- ------- -------- -------
$357,221 100.0% $403,877 100.0% $420,019 100.0%
======== ======= ======== ======= ======== =======

NINE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
-------------------- --------------------
SALES % OF SALES SALES % OF SALES
-------- ---------- -------- ----------

Ford(1).................... $141,761 46.3% $159,741 50.5%
General Motors(2).......... 77,535 25.3 77,834 24.7
Nissan..................... 30,897 10.1 21,043 6.7
Toyota..................... 16,655 5.4 12,384 3.9
Mitsubishi................. 7,802 2.5 8,386 2.7
Mazda...................... 5,816 1.9 7,628 2.4
Isuzu...................... 7,134 2.3 7,362 2.3
Chrysler/Dodge/Plymouth.... 5,456 1.8 6,246 2.0
Kia........................ 4,406 1.4 5,045 1.6
Honda...................... 5,037 1.6 4,728 1.5
Jeep/Eagle................. 2,098 0.7 2,402 0.8
Hummer..................... 2,140 0.7 2,898 0.9
Other(3)................... -- -- -- --
-------- ------- -------- -------
$306,737 100.0% $315,697 100.0%
======== ======= ======== =======

4
7

YEAR ENDED JUNE 30,
------------------------------------------------------------------
1995 1996 1997
-------------------- -------------------- --------------------
COSTS % OF COSTS COSTS % OF COSTS COSTS % OF COSTS
-------- ---------- -------- ---------- -------- ----------

Ford(1).................... $141,779 42.0% $167,986 43.7% $191,529 48.1%
General Motors(2).......... 106,683 31.5 104,452 27.2 94,322 23.6
Nissan..................... 39,065 11.5 43,608 11.4 40,647 10.2
Toyota..................... 16,402 4.8 20,868 5.4 16,840 4.2
Mitsubishi................. 2,298 0.7 5,849 1.5 10,506 2.6
Mazda...................... 1,958 0.6 4,935 1.3 9,930 2.5
Isuzu...................... 14,433 4.3 12,033 3.1 9,029 2.3
Chrysler/Dodge/Plymouth.... 9,253 2.7 7,619 2.0 8,399 2.1
Kia........................ -- -- 4,395 1.1 6,752 1.7
Honda...................... -- -- 5,700 1.5 5,740 1.4
Jeep/Eagle................. 2,696 0.8 2,930 0.8 3,249 0.8
Hummer..................... 1,817 0.5 2,617 0.7 2,060 0.5
Other(3)................... 2,074 0.6 1,005 0.3 -- --
-------- ------- -------- ------- -------- -------
$338,458 100.0% $383,997 100.0% $399,003 100.0%
======== ======= ======== ======= ======== =======

NINE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
-------------------- --------------------
COSTS % OF COSTS COSTS % OF COSTS
-------- ---------- -------- ----------

Ford(1).................... $133,906 46.0% $150,640 50.2%
General Motors(2).......... 72,924 25.0 75,208 25.1
Nissan..................... 30,370 10.4 20,214 6.7
Toyota..................... 15,638 5.4 11,654 3.9
Mitsubishi................. 7,637 2.6 7,938 2.6
Mazda...................... 5,455 1.9 7,108 2.4
Isuzu...................... 6,858 2.4 7,042 2.3
Chrysler/Dodge/Plymouth.... 5,286 1.8 5,994 2.0
Kia........................ 4,306 1.5 4,792 1.6
Honda...................... 4,738 1.6 4,448 1.5
Jeep/Eagle................. 1,986 0.7 2,307 0.8
Hummer..................... 2,010 0.7 2,772 0.9
Other(3)................... -- -- -- --
-------- ------- -------- -------
$291,114 100.0% $300,117 100.0%
======== ======= ======== =======

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

(1) Ford includes both the Ford division and the Mercury division.

(2) General Motors includes the divisions of Buick, Cadillac, Chevrolet, GMC,
Oldsmobile and Pontiac.

(3) Boomershine Automotive Group, Inc. divested its Subaru franchise during the
fiscal year ended June 30, 1996.

THE AUTOMOTIVE RETAILING INDUSTRY

The automotive retailing industry, with aggregate revenues of approximately
$491.1 billion in 1996 for franchised dealers alone, is the largest retail
market in the United States. Aggregate revenues for the southeastern United
States, which will be the Company's primary area of operations and is comprised
of the states of Alabama, Florida, Georgia, North Carolina, South Carolina and
Tennessee, amounted to approximately $89.8 billion through franchised dealers in
1996 and accounted for approximately 18% of total franchised dealer revenues in
the United States. Since 1990, the industry has experienced growth in total
revenues, total gross profits and income before taxes. From 1990 to 1996, for
franchised dealers alone, total revenues increased 53.5% from $320.0 billion in
1990 to $491.1 billion in 1996, total gross profits increased 33.3% from $46.9
billion in 1990 to $62.5 billion in 1996, and income before taxes increased
131.3% from $3.2 billion in 1990 to $7.4 billion in 1996. The industry has been
experiencing a consolidation trend which has seen the number of franchised
dealerships in the United States decline from approximately 36,000 in 1960 to
22,750 in 1996. Despite this consolidation, fragmentation is still a defining
characteristic of the industry, with the largest 100 franchised dealership
groups generating less than 10% of 1996 total franchised dealer revenue and
controlling less than 5% of all franchised automotive dealerships. However, as a
result of the increasing capital requirements necessary to operate an automotive
dealership, the management succession planning concerns of many current dealers,
and other economic and industry factors, the Company expects a further
consolidation of the automotive retailing industry.

BUSINESS STRATEGY

Sunbelt intends to establish itself as the leading operator of automotive
dealerships in small and medium-sized markets in the southeastern United States
through acquisitions of additional dealerships in these markets. The Company
believes that its diverse portfolio of brands and dealerships in several of
these markets and its experienced management team will give it a competitive
advantage in achieving this goal.

OPERATING STRATEGY

The Company intends to pursue an operating strategy based on the following
key elements:

5
8

The Company believes that its brand and product diversity will enable
the Company to satisfy a variety of customers, reduce dependence on
any one manufacturer and reduce exposure to supply problems and
product cycles. The Company believes that its variety of complementary
products and services will allow the Company to generate incremental
revenue that will result in higher profitability and less cyclicality
for the Company than if it were solely dependent on automobile sales.

- Institute Divisional Organization by Manufacturer. The Company
intends to institute a corporate organizational form which the Company
believes will differentiate it from most other automotive retailing
companies. The Company intends to organize its dealerships and
dealership groups by manufacturer, so that all dealerships which carry
a particular manufacturer's brands would be grouped together in a
single division. Each division, in turn, would be headed by a member
of corporate management who has extensive working experience with the
applicable manufacturer. The Company initially intends to implement
this organizational structure only for its Ford and Mercury
dealerships. Once the Company owns an appropriate number of
dealerships affiliated with another single manufacturer and the
Company has achieved an appropriate sales volume with respect to such
manufacturer's vehicles, the Company intends to implement this
organizational structure for those dealerships. The Company believes
that such a corporate structure does not require any manufacturer's
approval and will not impact any other dealership requirements imposed
by manufacturers. However, the Company does not know if any
manufacturers, other than Ford, agree with this interpretation, and
therefore, the Company intends to seek the approval of all applicable
manufacturers prior to implementing such a structure with respect to
each such manufacturer's dealerships. As of the date of this
Prospectus, the Company has neither sought, nor received, the approval
of any manufacturer, other than Ford, for its implementation of such a
structure. Ford has approved the Company's organizational structure
for its Ford and Mercury dealerships as part of its contingent
approval of the Company's acquisitions of the Ford and Mercury
dealerships. See "Business -- Dealership Operations" and
"Business -- Business Strategy." The Company believes that organizing
its dealerships by manufacturer and having each division headed by a
senior manager who is experienced with that particular
manufacturer -- and has established and maintained long-standing
business relationships with the regional and corporate managers of
that manufacturer -- will yield numerous benefits to the Company. For
example, the Company believes that its relationships with each
manufacturer will be enhanced; management training within each
division will be more efficient and consistent; and managers within
each division will benefit from a shared experience base. The Company
believes that these benefits will provide a competitive advantage to
the Company.

- Decentralize Marketing Strategies; Achieve High Levels of Customer
Satisfaction; Utilize Incentive-Based Compensation Programs. The
Company believes that many customers purchase automotive vehicles
based on an established long-term business relationship with a
particular dealership. Therefore the Company intends to empower its
experienced local management -- who have a better in-depth knowledge
of local customer needs and preferences -- to establish marketing,
advertising and other policies that foster these long-term
relationships and provide superior customer service. The Company's
strategy emphasizes the retention of local management, which the
Company believes will help make it an attractive acquiror of other
dealerships. The Company also intends to create incentives for
entrepreneurial management teams at the dealer level through the use
of stock options and other programs in order to align local
management's interests with those of the Company's shareholders. In
order to keep local management focused on customer satisfaction, the
Company also intends to include certain customer satisfaction index
("CSI") results as a component of its incentive compensation program.
The Company believes that this is important because some manufacturers
offer specific performance incentives, on a per vehicle basis, if
certain CSI levels (which vary by manufacturer) are achieved by a
dealer.

6
9

- Centralize Administrative Functions. The Company believes that the
consolidation of certain dealership functions and requirements will
result in significant cost savings. The Company intends to restructure
its floorplan financing, which the Company anticipates will result in
an overall reduced interest rate on such financing. Specifically, the
Company estimates that this rate will be approximately 50 to 75 basis
points below the Company's current average annual floorplan rates, and
expects that this lower rate will result in annual cost savings of
$750,000 to $1 million. In addition to the floorplan financing, the
Company is also negotiating a revolving credit facility. Furthermore,
the Company expects that significant cost savings will be achieved
through the consolidation of administrative functions such as risk
management, employee benefits and employee training.

GROWTH STRATEGY

The Company plans to grow its business using a strategy comprised of the
following principal elements:

- Acquire Dealerships. The Company's goal is to become the leading
operator of automotive dealerships in small and medium-sized markets
in the southeastern United States through acquisitions of additional
dealerships in these markets. The Company plans to pursue acquisitions
in markets where it does not currently own dealerships, as well as in
areas which are contiguous to its existing dealership markets. The
Company intends to focus on acquiring both dealer groups with multiple
franchises in a given market area and dealers with a single franchise
which possess significant market shares. Generally, the Company will
seek to retain the acquired dealerships' operational and financial
management, and thereby benefit from their market knowledge, name
recognition and local reputation.

- Expand Complementary Products and Services. The Company expects to
generate additional revenue and achieve higher profitability through
the sale of products and services which complement its dealership
operations. Examples of such opportunities include the following:

Collision Repair Centers. The Company owns four collision
repair facilities operated under the name Collision Centers
USA, which serve the Jonesboro, Duluth, Stockbridge and
Marietta, Georgia markets. The Company expects to expand this
business by increasing volumes at these four centers,
developing new centers and acquiring existing centers. The
Company's collision repair business provides higher margins
than its core retailing operations and is generally not
significantly affected by economic cycles or consumer spending
habits.

Finance and Insurance. The Company expects to offer its
customers a wide range of financing and leasing alternatives
for the purchase of vehicles, as well as credit life, accident
and health and disability insurance and extended service
contracts. The Company has recently entered into an agreement
with a leading insurance carrier to share in certain revenues
generated by the sale of extended warranty contracts. In
addition, in January 1998, the Company acquired South Financial
Corporation ("South Financial"), which has been primarily
engaged in the sub-prime automotive lending business for the
past eight years. The Company expects its dealer network to
provide additional loan business opportunities to South
Financial.

7
10

THE ACQUISITIONS AND THE MERGER

THE ACQUISITIONS

Since November 1997, the Company and/or Boomershine Automotive Group, Inc.
("Boomershine Automotive") (the accounting acquiror), which will be merged into
Sunbelt in the Merger, have consummated or signed definitive agreements to
acquire six dealership groups, three collision repair centers and one sub-prime
automotive lending business for aggregate consideration of approximately $67
million. The number of shares of the Company's unregistered common stock that it
expects to issue in each of the acquisitions will be determined by dividing the
aggregate stock consideration to be issued in each acquisition, which is fixed
under the terms of the respective agreements, by the offering price of the
common stock of the Company indicated on the cover page of this prospectus.
Specifically, the acquisitions consist of the following:

- The acquisition by Boomershine Automotive of Southlake Collision Center,
Inc., Southlake Collision Henry County, Inc. and Southlake Collision Cobb
Parkway, Inc., each of which is involved in the automotive collision
repair business. This acquisition was consummated on December 18, 1997 for
consideration of approximately $1.7 million, which included cash plus a
promissory note in the amount of $761,000;

- The acquisition by Boomershine Automotive of South Financial Corporation,
which is involved in the sub-prime automotive finance business. This
acquisition was consummated on January 6, 1998 for consideration of
approximately $4.6 million;

- The acquisition of Hones, Inc. d/b/a Bill Holt Ford Mercury, which is
involved in the automotive retailing business. This acquisition was
consummated on June 15, 1998 for consideration of approximately $750,000;

- The acquisition of Grindstaff, Inc., which is involved in the automotive
retailing business. This acquisition was consummated on July 31, 1998 for
consideration of $8.5 million (based on a purchase price of $9.1 million
less closing adjustments of approximately $600,000) in the form of a
short-term promissory note, plus or minus post-closing adjustments
described below;

- The acquisition of Jay Automotive Group, Inc., which is involved in the
automotive retailing business. The Company anticipates consummating this
acquisition upon the consummation of this Offering for consideration of
$12.0 million in cash and the Company's 90-day promissory note in the
amount of $4.0 million. The purchase price for the Jay Automotive Group,
Inc. acquisition includes payment for the acquisition of the Saturn and
Suzuki dealerships, which the Company expects to divest subsequent to the
consummation of this Offering;

- The acquisition of Wade Ford, Inc. and Wade Ford Buford, Inc. (the "Wade
Ford Dealerships"), both of which are involved in the automotive retailing
business. The Company anticipates consummating these acquisitions upon the
consummation of this Offering for consideration of approximately $12.0
million in cash and approximately $3.5 million in the form of the
Company's unregistered common stock, plus or minus consideration to be
determined by closing and post-closing adjustments described below;

- The acquisition of Day's Chevrolet, which is involved in the automotive
retailing business. The Company anticipates consummating this acquisition
upon the consummation of this Offering for consideration of approximately
$5.6 million in cash and approximately $5.2 million in the form of the
Company's unregistered common stock, plus or minus additional
consideration to be determined by post-closing adjustments described
below; and

- The acquisition of Robertson Oldsmobile-Cadillac, Inc., which is involved
in the automotive retailing business. Based on the March 31, 1998 FIFO net
worth of Robertson Oldsmobile-Cadillac, Inc., the consideration payable in
this acquisition would be approximately $7.7 million in cash and approxi-

8
11

mately $360,000 in the form of the Company's unregistered common stock.
This consideration is subject to the closing and post-closing adjustments
described below.

Each acquisition is hereinafter individually referred to as an
"Acquisition" and collectively referred to as the "Acquisitions." See "The
Acquisitions."

CLOSING AND POST-CLOSING ADJUSTMENTS

Wade Ford, Inc. and Wade Ford Buford, Inc. The purchase price for the Wade
Ford Dealerships is defined as $14.5 million, plus or minus the following
adjustments. If the Wade Ford Dealerships earn a profit during the period from
January 1, 1998 to the closing date, then Sunbelt shall pay to the selling
shareholders the entire amount of such profit less any distributions made by the
Wade Ford, Dealerships to the selling shareholders during such period. If the
Wade Ford, Dealerships incur a loss during the period from January 1, 1998 to
the closing date, the purchase price will be reduced by such amount. If the
aggregate cash accounts of the Wade Ford Dealerships amount to less than
$800,000, the purchase price will be reduced dollar for dollar by the
deficiency. Additionally, if the Wade Ford Dealerships' floor plan liability
exceeds their floor plan assets by more than 3%, the purchase price will be
reduced by such amount.

Day's Chevrolet, Inc. The purchase price for the Day's Chevrolet, Inc.
Acquisition is defined as $10.5 million, plus or minus the following
adjustments. If Day's Chevrolet, Inc. made distributions in excess of $1.0
million of the previously taxed income, paid-in capital and common stock of
Day's Chevrolet, Inc. as of December 31, 1997 (the "pre-1998 distributions"),
then the purchase price shall be reduced by such excess on a dollar for dollar
basis. The purchase price will be further adjusted to the extent that the
closing date net worth is greater or less than zero. Additionally, if Day's
Chevrolet, Inc.'s floor plan liability exceeds their floor plan assets by more
than 3%, the purchase price shall be reduced by such amount.

Robertson Oldsmobile-Cadillac, Inc. The purchase price for the Robertson
Oldsmobile-Cadillac, Inc. Acquisition is defined as $4.7 million plus the FIFO
net worth of Robertson Oldsmobile-Cadillac, Inc. on the closing date, as
described in the purchase agreement.

Grindstaff, Inc. The purchase price for the Grindstaff, Inc. Acquisition
was calculated to be $8.5 million and is subject to the following additional
adjustments. If the net income of Grindstaff, Inc. for the period from January
1, 1998 to June 30, 1998 is less than $927,944, then the selling shareholders
shall pay the entire amount of such deficiency to the Company. If the net income
of Grindstaff, Inc. for that period is greater than $927,944, then the Company
shall pay the entire amount of such excess to the selling shareholders.

PRICE PROTECTION PROVISIONS

In addition to the consideration described above, the Company may be
required to pay consideration not to exceed approximately $9.8 million in the
aggregate (in the form of cash and/or the Company's common stock) to certain
shareholders of the dealerships being acquired in the Day's Chevrolet and Wade
Ford Acquisitions pursuant to certain stock price protection provisions and/or
agreements entered into in connection with those transactions. Specifically, if
the price of the common stock subject to price protection is more on the date of
the Offering than the price of such common stock (i) on the first anniversary of
the Offering in the case of the Wade Ford Acquisition or (ii) on the second
anniversary of the Offering in the case of the Day's Chevrolet Acquisition, then
the Company is required to compensate the applicable target shareholders for
such price decrease in cash or by issuing additional shares of the Company's
common stock (however, pursuant to current policies of the Securities and
Exchange Commission (the "Commission"), the Company would not be able to deliver
registered stock to Day's Chevrolet and, therefore would be required to
compensate the Day's Chevrolet shareholders in cash for any such decrease). See
"Risk Factors -- Price Protection Provisions" and "Description of Capital
Stock -- Registration Rights and Stock Price Protection."

9
12

THE MERGER

In addition to the Acquisitions, the Company has signed a definitive
agreement to acquire by merger Boomershine Automotive Group, Inc. simultaneously
with the consummation of this Offering in exchange for 3,800,160 shares of
common stock of Sunbelt, based on an exchange ratio of 52.78 shares of the
Company's unregistered common stock in exchange for each share of common stock
of Boomershine Automotive Group, Inc., which is based on an assumed initial
public offering price of $10 per share, the midpoint of the estimated initial
public offering price range, and assumes a discount of 10%, which reflects the
stock's trading restrictions. See "The Merger." There will be no post-closing
adjustments to the consideration payable by the Company in connection with the
Merger.

CONSIDERATION RECEIVED BY CERTAIN PERSONS

The shareholders of Boomershine Automotive will receive the following
amounts of the Company's common stock upon consummation of the Merger: Walter M.
Boomershine, Jr. -- 570,024 shares (excludes 2,000 shares of common stock that
Mr. Boomershine currently owns); Walter M. Boomershine, III -- 696,696 shares;
Renee B. Jochum -- 633,360 shares; Jacquelyn B. Thompson -- 633,360 shares;
Patrice B. Mitchell -- 633,360 shares; Lindsey B. Robertson -- 633,360 shares.
Walter M. Boomershine, Jr. will serve as Chairman and Senior Vice President of
the Company, while Walter M. Boomershine, III, Lindsey B. Robertson and Patrice
B. Mitchell will serve as employees of the Company. In addition, Charles K.
Yancey and Ricky L. Brown, who are currently executive officers of Boomershine
Automotive, will serve as executive officers of the Company.

Additionally, certain persons receiving consideration in connection with
the Acquisitions will continue as employees of the Company upon consummation of
the Offering. In connection with the Wade Ford Acquisition, Alan K. Arnold and
Gary R. Billings will receive consideration in an aggregate amount of 385,000
shares of common stock and approximately $12.0 million in cash (plus or minus
closing and/or post-closing adjustments), which consideration will be allocated
between Mr. Arnold and Mr. Billings at closing of the Wade Ford Acquisition. Mr.
Arnold will serve as a director of the Company and Vice President of the
Company's Ford Division and Mr. Billings will serve as Executive Manager of Wade
Ford Buford, Inc. upon consummation of the Offering. In connection with the
Collision Centers USA Acquisition, James L. Peters received $1.7 million in the
form of cash and promissory notes as well as an option to purchase 5,000 shares
of the common stock at an exercise price of $8.00 per share. Mr. Peters
currently serves as Vice President of Collision Centers USA, which will be owned
by the Company upon consummation of the Offering. In connection with the
Robertson Acquisition, E. Moss Robertson, Jr. will receive approximately $7.7
million in cash and 40,000 shares of common stock (plus or minus closing and/or
post-closing adjustments). Mr. Robertson will serve as Executive Manager of
Robertson Oldsmobile-Cadillac, Inc. upon consummation of the Offering. In
connection with the Jay Automotive Group Acquisition, James G. Stelzenmuller,
III will receive $16.0 million in the form of cash and a promissory note. Mr.
Stelzenmuller will serve as Executive Manager of Jay Automotive upon
consummation of the Offering. In connection with the Day's Chevrolet
Acquisition, Calvin Diemer will receive $2.8 million in cash and $2.6 million in
common stock (plus or minus closing and post-closing adjustments). Mr. Diemer
will serve as Executive Manager of Day's Chevrolet, Inc. upon consummation of
the Offering. In connection with the Grindstaff Acquisition, Wes Hambrick will
receive approximately $850,000 in cash (plus or minus post-closing adjustments).
Mr. Hambrick will serve as Executive Manager of Grindstaff, Inc. upon
consummation of the Offering.

STOCK OPTIONS TO BE GRANTED TO EXECUTIVE OFFICERS AND DIRECTORS UPON COMPLETION
OF THIS OFFERING

Upon the completion of this Offering, the Company intends to reserve the
following shares underlying options to be granted to its executive officers and
directors: 25,000 shares underlying options to Walter M. Boomershine, Jr.
(executive officer and Chairman of the Board of Directors); 50,000 shares
underlying options to Robert W. Gundeck (executive officer and director);
100,000 shares underlying options to Charles K. Yancey (executive officer and
director); 100,000 shares underlying options to Stephen C. Whicker (executive
officer and director); 25,000 shares underlying options to Ricky L. Brown
(executive officer); and

10
13

5,000 shares underlying options to each of George D. Busbee, Lee M. Sessions,
Jr. and Jack R. Altherr (directors).

PRINCIPAL OFFICE

The Company's principal executive office is located at 5901
Peachtree-Dunwoody Road, Suite 250-B, Atlanta, Georgia 30328, and its telephone
number at that location is (678) 443-8100.

THE OFFERING

Common stock offered hereby............. 5,500,000 shares

Common stock to be outstanding after the
Offering................................ 10,557,862 shares(1)(2)

Use of proceeds......................... The net proceeds of the Offering
will be used to fund the
Acquisitions, including repaying
certain indebtedness incurred by
the Company in connection
therewith, and for working capital
and general corporate purposes. See
"The Acquisitions" and "Use of
Proceeds."

Proposed Nasdaq National Market
Symbol.................................. SBLT
- ---------------

(1) Excludes 2,250,000 shares of common stock reserved for future issuance to
Company employees under the Company's Incentive Stock Plan (as defined
herein) (including up to 1,597,000 shares of common stock issuable upon
exercise of options granted on or before the consummation of the Offering
pursuant to the Incentive Stock Plan, with the following shares reserved in
connection with grants to executive officers and directors: 25,000 shares
underlying options granted to Walter M. Boomershine, Jr. (executive
officer); an aggregate of 350,000 shares underlying options granted to
Robert W. Gundeck (executive officer); an aggregate of 540,000 shares
underlying options granted to Charles K. Yancey (executive officer); an
aggregate of 540,000 shares underlying options granted to Stephen C. Whicker
(executive officer); an aggregate of 120,000 shares underlying options
granted to Ricky L. Brown (executive officer); and 5,000 shares underlying
options granted to each of George D. Busbee, Lee M. Sessions, Jr. and Jack
R. Altherr (each, a director)). See "Management -- Incentive Stock Plan."
Also excludes 50,000 shares of common stock reserved for issuance upon
exercise of warrants granted to a consulting firm for services rendered in
connection with this Offering. See "Description of Capital
Stock -- Warrants."
(2) Includes 249,202 shares of common stock issued to executive officers of the
Company. See "Description of Capital Stock -- Common Stock."

11
14

RISK FACTORS -- GENERAL

The Company's acquisition program may be limited by the automobile
manufacturers with which the Company has a Franchise Agreement (as hereinafter
defined). Pursuant to the manufacturers' policies known to the Company to be in
effect as of the date of this Offering or in connection with the manufacturers'
approvals of the Acquisitions and the Merger, the Company may acquire the
following:

- A maximum of 10 Chrysler dealerships; seven Toyota dealerships; three
Lexus dealerships; seven Honda dealerships; three Acura dealerships; five
GM dealerships in a two-year period, but no additional dealerships in the
12 to 24 month period following this Offering; the lesser of 15 Ford and
15 Lincoln dealerships or that number of Ford and Lincoln Mercury
dealerships accounting for two percent of the preceding year's retail
sales of those brands in the United States; no contiguous market ownership
of Mazda dealerships; and 61 Nissan and Infiniti dealerships. The Company
has not been advised and is not aware of any limitations on the number of
Hummer, Isuzu, Kia or Mitsubishi dealerships it may own.

- A maximum of the following dealerships in the Company's existing market
areas: (a) in the metropolitan Atlanta market, 25% of the Ford dealerships
in said market area; 50% of the GM dealerships in said market area; six
Chrysler dealerships in the same sales zone and two dealerships in said
market area; two Toyota dealerships in the Atlanta market and four in the
region; two Lexus dealerships; two Honda dealerships; one Acura
dealership; no contiguous market ownership of Mazda dealerships, but up to
two Mazda dealerships in the Atlanta market; no more than 30 Nissan and
Infiniti dealerships in the Atlanta region; and (b) in the non-Atlanta
market, one Ford dealership in market areas with less than three Ford
dealerships; 50% of the GM dealerships in the market area; six Chrysler
dealerships in the same sales zone and two in the same market; the greater
of one Toyota dealership or 20% of Toyota dealerships in a market and the
lesser of five Toyota dealerships or 5% of the Toyota dealerships in any
Toyota region; six Lexus dealerships in the same sales zone and two in the
same market; one Honda dealership in a market area represented by two to
10 Honda points; one Acura dealership in a metropolitan market area which
has two or more Acura points and two Acura points in any one of six Acura
geographic points; no contiguous market ownership of Mazda dealerships,
but may own up to two Mazda dealerships in a metro market; and no more
than 20% of Nissan and Infiniti dealerships in any region.

- A maximum additional number of the following dealerships in the Company's
existing markets: 26 additional Ford/Mercury dealerships; no additional GM
dealerships for at least a 12-month period following the completion of
this Offering, subject to GM's allowance of more than the five GM
dealership groups that the Company will own upon the consummation of the
Merger and the Acquisitions under certain circumstances within GM's
discretion; with respect to Chrysler dealerships, nine additional
dealerships in the Southeast or six additional dealerships in the same
sales zone or two additional dealerships in the same market (less the
number of Chrysler dealerships the Company already has in such sales zone
or market); six additional Toyota dealerships; three additional Lexus
dealerships; six additional Honda dealerships; three additional Acura
dealerships; 29 additional Nissan and Infiniti dealerships; with respect
to Mazda dealerships, no contiguous market ownership of dealerships, but
one additional Mazda dealership in each of the Atlanta and Gainesville,
Georgia, metro markets; and an unknown number of additional dealerships of
the following manufacturers: Hummer, Isuzu, Kia and Mitsubishi.

12
15

The restrictions and maximum number of dealerships of each manufacturer set
forth above are based on the Company's knowledge of each applicable
manufacturer's policies existing on the date of this Prospectus. There can be no
assurance that the manufacturers will not modify such restrictions in the
future, either generally or on a case-by-case basis, and the Company expects
that the manufacturers will impose other general policy restrictions on the
Company in addition to ownership limitations. See "Business -- Relationships
with Manufacturers" and "Risk Factors -- Manufacturers' Restrictions on the
Merger, the Acquisitions and Future Acquisitions."

See "Risk Factors" beginning on page 16 for certain additional information
that should be considered by prospective investors.

13
16

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The Company will acquire Boomershine Automotive via the Merger
contemporaneously with the consummation of the Offering. For financial statement
purposes, Boomershine Automotive has been identified as the accounting acquiror.
The following summary financial data presents (i) summary historical
consolidated financial data of Boomershine Automotive as of the dates and for
the periods indicated and (ii) summary pro forma financial data as of the dates
and for the periods indicated giving effect to the events described in the "Pro
Forma Combined and Condensed Financial Data" included elsewhere herein as though
they had occurred on the dates indicated therein. The following Summary
Historical and Pro Forma Financial Data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the Consolidated Financial Statements of Boomershine Automotive and
the related notes and "Pro Forma Combined and Condensed Financial Data" included
elsewhere in this Prospectus. In connection with the FIFO Conversion (as
hereinafter defined), and in accordance with generally accepted accounting
principles, the Summary Historical and Pro Forma Financial Data has been
retroactively restated to reflect the FIFO Conversion by Boomershine Automotive.
The Summary Historical and Pro Forma Combined Financial Data below are not
necessarily indicative of the results of operations or financial position that
would have resulted had the Merger, the Acquisitions and the Offering occurred
during the periods presented or that may be expected for the full year or any
other interim period.

YEAR ENDED JUNE 30, NINE MONTHS ENDED MARCH 31,
---------------------------------------------------------------- -------------------------------
HISTORICAL(1) HISTORICAL(1)
---------------------------------------------------- PRO FORMA ------------------- PRO FORMA
1993 1994 1995 1996 1997 1997(2) 1997 1998 1998(2)
-------- -------- -------- -------- -------- --------- -------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AND OTHER OPERATING DATA)

STATEMENT OF OPERATIONS DATA:
Revenues:
Vehicle sales:
New...................... $ 73,912 $110,674 $156,955 $166,199 $152,625 $420,019 $113,239 $113,340 $315,697
Used..................... 35,747 46,207 57,047 64,652 61,811 177,925 47,318 39,517 127,126
Parts and service.......... 15,085 17,679 19,223 23,764 24,637 66,602 17,689 19,108 50,159
Finance, commissions and
other revenues........... 1,858 3,717 5,095 8,278 8,372 23,423 6,514 6,701 17,308
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total revenues....... 126,602 178,277 238,320 262,893 247,445 687,969 184,760 178,666 510,290
Cost of sales................ 112,680 159,676 215,646 235,828 222,352 612,273 165,705 158,328 453,299
-------- -------- -------- -------- -------- -------- -------- -------- --------
Gross profit................. 13,922 18,601 22,674 27,065 25,093 75,696 19,055 20,338 56,991
Selling, general and
administrative expenses.... 12,751 16,685 19,927 24,170 22,263 62,935 16,698 16,544 48,137
Depreciation and
amortization............... 428 410 406 600 889 2,550 659 764 1,984
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income from operations....... 743 1,506 2,341 2,295 1,941 10,211 1,698 3,030 6,870
Interest expense, net........ 587 598 1,436 1,774 2,230 3,331 1,408 1,544 1,923
Interest income.............. 144 119 218 181 120 516 184 247 699
Other income (expense),
net........................ 98 (110) 60 13 44 (240) (80) (68) 100
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before income
taxes...................... 398 917 1,183 715 (125) 7,156 394 1,665 5,746
Income tax (expense)
benefit.................... (151) (450) (448) (213) 40 (3,109) (119) (398) (2,481)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net income (loss)............ $ 247 $ 467 $ 735 $ 502 $ (85) $ 4,047 $ 275 $ 1,267 $ 3,265
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic:
Net income per share(3).... $ 0.39 $ 0.32
======== ========
Weighted average shares
outstanding(3)........... 10,309 10,309
======== ========
Fully diluted:
Net income per share(3).... $ 0.38 $ 0.31
======== ========
Weighted average shares
outstanding(3)........... 10,648 10,648
======== ========
OTHER OPERATING DATA:
Gross margin................. 11.0% 10.4% 9.5% 10.3% 10.1% 11.0% 10.3% 11.4% 11.2%
Operating margin............. 0.6% 0.8% 1.0% 0.9% 0.8% 1.5% 0.9% 1.7% 1.3%
Pre-tax margin............... 0.3% 0.5% 0.5% 0.3% (0.0)% 1.0% 0.2% 0.9% 1.1%
New vehicles sold............ 4,583 6,677 9,187 9,206 7,834 20,499 5,803 5,485 14,583
Used vehicles sold........... 4,770 6,378 6,753 7,453 6,908 19,355 5,291 4,552 12,776

AS OF MARCH 31, 1998
-------------------------------
AS OF PRO FORMA
JUNE 30, 1997(1) HISTORICAL(1) AS ADJUSTED(2)
---------------- ------------- --------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital............................................. $ 5,885 $ 760 $ 18,202
Inventories................................................. 39,553 47,733 115,923
Total assets................................................ 55,672 88,949 223,045
Total debt, including current portion....................... 40,618 70,925 140,599
Total shareholders' equity.................................. 7,973 9,240 65,804

14
17

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

(1) In connection with the Merger and the Offering, Boomershine Automotive
converted from the last-in, first-out method (the "LIFO Method") of
inventory accounting to the specific identification method of inventory
accounting (the "FIFO Conversion"), conditioned upon the closing of the
Offering. In connection with the FIFO Conversion, and in accordance with
generally accepted accounting principles, the accompanying financial
information of Boomershine Automotive has been retroactively restated to
reflect the FIFO Conversion.
(2) Adjusted to give pro forma effect to (i) the Merger, (ii) the Acquisitions,
and (iii) the sale of the shares of common stock offered hereby and the
application of the net proceeds therefrom. To conform with Boomershine
Automotive's fiscal year end of June 30, the unaudited pro forma statements
of operations include financial data for each Acquisition for the same
periods presented for Boomershine Automotive. See "Pro Forma Combined and
Condensed Financial Data" and "Use of Proceeds."
(3) Historical net income per share is not presented, as the historical capital
structure of Boomershine Automotive prior to the Merger, the Acquisitions
and the Offering is not comparable with the capital structure that will
exist subsequent to these events. The weighted average shares outstanding
was calculated taking into account these events as if they had occurred at
the beginning of each period. See "Pro Forma Combined and Condensed
Financial Data."

15
18

RISK FACTORS

Prospective investors should carefully consider and evaluate all of the
information set forth in this Prospectus, including the risk factors set forth
below, prior to making an investment in the common stock offered hereby.

DEPENDENCE ON AUTOMOBILE MANUFACTURERS

Each of the dealerships that the Company owns or expects to acquire upon
consummation of the Offering operates pursuant to a dealer sales and service
agreement, or a similar named agreement, between the applicable automobile
manufacturer (or authorized distributor thereof) and the company that operates
the automotive dealership ("Franchise Agreement"). The Company will be dependent
to a significant extent on its relationship with such manufacturers and the
terms and conditions of these Franchise Agreements.

NINE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
-------------------- --------------------
SALES % OF SALES SALES % OF SALES
-------- ---------- -------- ----------

YEAR ENDED JUNE 30,
------------------------------------------------------------------
1995 1996 1997
-------------------- -------------------- --------------------
COSTS % OF COSTS COSTS % OF COSTS COSTS % OF COSTS
-------- ---------- -------- ---------- -------- ----------

NINE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
-------------------- --------------------
COSTS % OF COSTS COSTS % OF COSTS
-------- ---------- -------- ----------

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

(1) Ford includes both the Ford division and the Mercury division.

(2) General Motors includes the divisions of Buick, Cadillac, Chevrolet, GMC,
Oldsmobile and Pontiac.

(3) Boomershine Automotive divested its Subaru franchise during the fiscal year
ended June 30, 1996.

Ford Motor Company ("Ford"), General Motors Corporation ("GM") and Nissan
Motor Co., Ltd. ("Nissan") are the only manufacturers that accounted for more
than 10% of the new vehicle sales of the dealerships that the Company owns or
expects to acquire upon consummation of the Offering during such periods. See
"Business -- New Vehicle Sales," and "Business -- Relationships with
Manufacturers." Accord-

16
19

ingly, a significant decline in the sale of Ford, GM, or Nissan new cars could
have a material adverse effect on the Company's business, financial condition
and results of operations.

Manufacturers exercise a great degree of control over the operations of the
Company's dealerships. Each of the Franchise Agreements generally provides for
termination or non-renewal for a variety of causes, including any unapproved
change in ownership or management and other material breaches of the Franchise
Agreements. The Company is currently seeking the approval of all manufacturers
of the Company's franchised dealers to the Acquisitions, the Merger and this
Offering. However, as of the date hereof, the Company has not received the
approval of any automobile manufacturer with respect to the Merger, the
Acquisitions or the Offering, except for final approval from Hummer, contingent
approval from Ford and verbal approval from Chrysler, GM and Nissan. There can
be no assurance that the Company will be able to obtain final approval of any
manufacturer, other than Hummer, prior to the closing date of this Offering.

The Company has no reason to believe that it will not be able to replace or
renew all of its Franchise Agreements upon expiration, but there can be no
assurance that any of such agreements will be replaced or renewed or that the
terms and conditions of such replacement or renewal Franchise Agreements will be
favorable to the Company. If a manufacturer terminates or declines to replace or
renew one or more of the Company's significant Franchise Agreements, or if the
terms and conditions for the replacement or renewal of the Company's significant
Franchise Agreements are less favorable than the Company's current agreements,
such actions or events could have a material adverse effect on the Company's
business, financial condition and results of operations. See
"Business -- Relationships with Manufacturers."

The Company will also depend on the manufacturers to provide it with a
desirable mix of the most popular new vehicles that produce the highest profit
margins and which may be the most difficult to obtain from the manufacturers.
For a discussion on how the manufacturers allocate the mix of vehicle models,
see "Business -- New Vehicle Sales." If the Company is unable to obtain a
sufficient allocation of the most popular vehicles, such event could have a
material adverse effect on the Company's business, financial condition and
results of operations. In some instances, in order to obtain additional
allocations of these vehicles, the Company may be required to purchase a larger
number of less desirable models than it would otherwise purchase, which could
have a material adverse effect on the Company's business, financial condition
and results of operations. The dealerships that the Company owns or expects to
acquire upon consummation of the Offering depend on the manufacturers for
certain sales incentives and other programs that are intended to promote
dealership sales or support dealership profitability. Manufacturers have
historically made many changes to their incentive programs during each year. A
reduction or discontinuation of, or other material change in, a manufacturer's
incentive programs may have a material adverse effect on the Company's business,
financial condition and results of operations.

The success of each of the dealerships that the Company owns or expects to
acquire upon consummation of the Offering depends to a great extent on the
financial condition, marketing, vehicle design, production capabilities and
management of the respective manufacturers. Additionally, the delivery of
vehicles from manufacturers later than scheduled, which may occur particularly
during periods when new products are being introduced, can lead to reduced
sales. Although the Company is attempting to lessen its dependence on any one
manufacturer by establishing dealer relationships with a number of different
domestic and foreign automobile manufacturers, adverse conditions affecting
Ford, GM or Nissan, in particular, could have a material adverse affect on the
Company's business, financial condition and results of operations. See
"Business -- New Vehicle Sales" and "Business -- Relationships with
Manufacturers."

MANUFACTURERS' RESTRICTIONS ON THE MERGER, THE ACQUISITIONS AND FUTURE
ACQUISITIONS

The Company is required to obtain the consent of the applicable
manufacturer prior to any transfer or change in ownership of the dealership
franchises. Consequently, the Merger, the Acquisitions, the Offering and all
future acquisitions will require approval by the applicable manufacturers. There
can be no assurance that manufacturers will grant such approvals. Obtaining the
consent of the manufacturers for acquisitions of dealerships could also take a
significant amount of time. Obtaining the approvals of the manufacturers for the
Merger, the Acquisitions and the Offering is an ongoing process and will
continue through the date of the Offering. The Company is currently seeking the
approval of all manufacturers of the franchised dealers that

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20

the Company owns or expects to acquire upon consummation of the Offering for the
Acquisitions, the Merger and this Offering. As of the date of this Prospectus,
Ford has provided to the Company preliminary approval, and Hummer has provided
to the Company final approval, of the Company's proposed Merger, Acquisitions
and this Offering. The Company has executed the Ford Master Public Agreement and
new Franchise Agreements for each of the proposed acquisitions of Ford and/or
Mercury dealerships. These agreements and Ford's final approval of the Merger,
Acquisitions and this Offering are subject to the Company's completion of this
Offering. GM, Chrysler and Nissan have verbally informed the Company that they
anticipate approving the Merger, the Acquisitions and this Offering and the
proposed acquisitions of GM, Chrysler and Nissan dealerships, as applicable,
pursuant to the Acquisitions and the Merger. The final approvals of GM,
Chrysler, and Nissan are subject to the completion of this Offering. In
addition, the final approvals of Nissan and GM are subject to the execution of
the Nissan Public Ownership Addendum, an Agreement between the Company and
Nissan Motor Corporation USA, and a Supplemental Agreement to the General Motors
Corporation Dealer Sales and Service Agreement. As of the date hereof, the
Company has not obtained the approval of any other manufacturers, and no
manufacturer, other than Hummer, will give its final approval prior to the
consummation date of this Offering. If the Company fails to obtain any
manufacturer's approval, the Company may be required to discontinue its
Franchise Agreement with such manufacturer and sell the franchise back to the
manufacturer or to some other third party. Saturn Corporation ("Saturn") has
generally not approved the public ownership of its dealership franchises.
Although the Company recently requested Saturn's approval, the Company expects
to divest the Jay Automotive Group Saturn dealership in Columbus, Georgia. For
this reason, the financial results of the Jay Automotive Group Saturn dealership
have not been included in this Prospectus.

The Company's growth strategy is predicated in part on the ability of the
Company to acquire additional automotive dealerships. If the Company experiences
delays in obtaining, or fails to obtain, approvals of the manufacturers for
acquisitions of dealerships, the Company's growth strategy could be materially
adversely affected. In determining whether to approve the Merger and the
Acquisitions and any future mergers or acquisitions, the manufacturers may
consider many factors, including the moral character, business experience,
financial condition and ownership structure of the Company and its management,
along with the consumer satisfaction experiences of the Company's customers.
Moreover, under an applicable Franchise Agreement or under state law, a
manufacturer may have a right of first refusal to acquire a dealership in the
event the Company seeks to acquire that dealership franchise.

The restrictions and maximum number of dealerships of each manufacturer
discussed below are based on the correspondence that the Company has received
from each applicable manufacturer. To the extent the Company has not received
any correspondence or other indication from a manufacturer concerning such
manufacturer's restrictions, the table below indicates that such information is
unknown to the Company with respect to such manufacturer. However, there can be
no assurance that the manufacturers will not modify such restrictions in the
future, either generally or on a case-by-case basis, and the Company expects
that the manufacturers will impose other general policy restrictions on the
Company in addition to ownership limitations.

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21

The following table sets forth, as of the date of this Prospectus and with
respect to all manufacturers with whom the Company expects to have Franchise
Agreements after the consummation of this Offering, the Merger and the
Acquisitions, (i) the manufacturers' policies on public company ownership; (ii)
the additional restrictions of the manufacturers on the number of dealerships a
public company may own in a particular region, zone or market, to the extent
known to the Company as of the date hereof; (iii) the number of dealerships of
each manufacturer's brands that the Company will own upon the consummation of
the Merger and the Acquisitions as such number is calculated for purposes of the
manufacturers' restrictions; and (iv) the maximum number of additional
dealerships the Company believes it may own/acquire nationally and in the
Southeastern United States pursuant to manufacturer's restrictions. The Company
expects that all of these restrictions will be imposed by the manufacturers on
the Company.

(I) (II) (III) (IV)
------------------- ------------------------------------ --------------- -------------
RESTRICTIONS ON THE MAXIMUM
NUMBER OF NUMBER OF
DEALERSHIPS ADDITIONAL
COMPANY MAY NUMBER OF DEALERSHIPS
OWN/ACQUIRE DEALERSHIPS COMPANY MAY
PURSUANT TO OWNED FOR OWN/ ACQUIRE
PRESENT PURPOSES OF NATIONALLY/IN
MANUFACTURERS' ADDITIONAL RESTRICTIONS ON NUMBER OF MANUFACTURERS' SOUTHEASTERN
MANUFACTURER RESTRICTIONS DEALERSHIPS IN A REGION/ZONE/MARKET RESTRICTIONS(6) U.S.
- ----------------------------- ------------------- ------------------------------------ --------------- -------------

Chrysler(1).................. No more than 10 No more than maximum of 6 Chrysler 1 9/9
dealerships dealerships in the same sales zone (Chrysler-
(as defined by Chrysler) and 2 Dodge-Jeep-
Chrysler dealerships in the same Plymouth;
market (but no more than 1 like Elizabethton,
vehicle brand in the same market) TN)
Ford/Mercury(2).............. The lesser of (i) No more than 1 Ford dealership in 4 26/26
15 Ford and 15 any market area (as defined by Ford) (2 Ford/
Lincoln Mercury that has 3 or fewer Ford dealerships Mercury,
dealerships or (ii) and no more than 25% of the Ford Buford, GA and
that number of Ford dealerships in a market area having Franklin, NC; 2
and Lincoln Mercury 4 or more Ford dealerships Ford, Smyrna
dealerships and Duluth, GA)
accounting for 2%
of the preceding
year's retail sales
of those brands in
the United States
General Motors(3)............ No additional No more than 50% of the GM 5 None for at
dealerships for at dealerships (by franchise line) in a (2 Pontiac- least 12-24
least 12-24 months; GM-defined geographic market area Buick-GMC, months
Acquisitions of no having multiple GM dealerships, and Smyrna and following
more than 5 GM may further limit acquisitions of Columbus, GA; 2 Offering;
dealerships during GM dealerships by a single public Chevrolet, thereafter 5
a two-year period. company until all existing GM Acworth, GA and nationally
dealerships of that public company Elizabethton, and no more
meet certain GM criteria for sales, TN; 1 than 50% of
market penetration, CSI and other Oldsmobile- the GM
GM-established standards Cadillac, dealerships
Gainesville, (by franchise
GA) line) in a
GM-defined
geographic
market area
having
multiple GM
dealerships

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22

American Honda Co., Inc. 7 Honda dealerships Public companies restricted to (i) 1 1 (Honda, 6 Honda and 3
("Honda")(4)............... and 3 Acura Honda dealership in a "Metro" market Cartersville, Acura/6 Honda
dealerships (defined by Honda as a metropolitan GA) and 3 Acura
market with 2 or more Honda
dealerships) with 2 to 10 dealership
points; (ii) 2 Honda dealerships in
a Metro market with 11 to 20 Honda
dealership points; (iii) 3 Honda
dealerships in a Metro market with
21 or more Honda dealership points;
(iv) no more than 4% of the Honda
dealerships in any 1 of the 10 Honda
geographic zones; (v) 1 Acura
dealership in a "Metro" market (a
metropolitan market with 2 or more
Acura dealership points); and (vi) 2
Acura dealerships in any 1 of the 6
Acura geographic zones
Hummer....................... Restrictions Restrictions unknown to the Company 1 (Smyrna, GA) Unknown
unknown to the
Company
Isuzu........................ Restrictions Restrictions unknown to the Company 2 (Duluth and Unknown
unknown to the Gainesville,
Company GA)
Kia.......................... Restrictions Restrictions unknown to the Company 1 Unknown
unknown to the (Elizabethton,
Company TN)
Mazda........................ No contiguous No contiguous market ownership is 2 (Columbus and No contiguous
market ownership is allowed; provided, however, in a Gainesville, market
allowed; provided, metro market, multiple dealership GA) ownership is
however, in a metro ownership not exceeding 2 allowed;
market, multiple dealerships is allowed provided,
dealership however, in a
ownership not metro market,
exceeding 2 multiple
dealerships is dealership
allowed ownership not
exceeding 2
dealerships
is allowed
Mitsubishi................... Restrictions Restrictions unknown to the Company 2 (Kennesaw, Unknown
unknown to the and Columbus,
Company GA)
Nissan....................... Nationally, no No individual or entity may own more 1 (Duluth, GA) 60/29
individual or than 20% of the region's total
entity may own more number of Nissan and Infiniti
than 5% of the dealerships
total number of
Nissan and Infinity
dealerships

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23

Toyota Motor Corporation 7 Toyota Number of Toyota dealerships that 1 (Toyota, 6 Toyota and
("Toyota")(5).............. dealerships and 3 may be owned by a single public Columbus, GA) 3 Lexus/6
Lexus dealerships company are limited to (i) the Toyota and 3
greater of 1 dealership or 20% of Lexus
the number of Toyota dealer counts
in a "Metro" market (as defined by
Toyota); (ii) the lesser of 5 Toyota
dealerships or 5% of the number of
Toyota dealer counts in any Toyota
region (as defined by Toyota; there
are currently 12 regions); and (iii)
2 Lexus dealerships in any 1 of the
4 Lexus geographic areas

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

(1) Chrysler may also ask the Company to limit its acquisitions, or defer any
future acquisitions, of Chrysler or Chrysler division dealerships until the
Company has established a proven performance record with the Chrysler
dealerships it owns or is acquiring in the Acquisitions.
(2) Ford has also informed the Company that it may not make any additional
acquisitions of Ford, Lincoln or Mercury dealerships for a 12-month period
following the closing of this Offering.

(3) GM's communications with the Company to date indicate that GM will restrict
the Company from acquiring any additional GM dealerships for a period of no
less than 12 months -- and up to 24 months -- following the closing of this
Offering.

(4) Honda also prohibits the ownership of contiguous dealerships and the
coupling of a franchise with any other brand without its consent.
(5) The Company also believes that Toyota has required that at least nine months
elapse between acquisitions of its dealerships. Toyota also prohibits the
ownership of contiguous dealerships and the coupling of a franchise with any
other brand without its consent.
(6) The number of dealerships the Company will own upon the consummation of the
Acquisitions and the Merger for purposes of manufacturers' restrictions
differs from the actual number of dealership franchises the Company will own
under separate Franchise Agreements upon the consummation of the
Acquisitions and the Merger because certain manufacturers group their brands
together for purposes of calculating the Company's dealerships for
manufacturer restriction purposes. For example, the Company operates its
Pontiac, Buick and GMC dealerships under separate franchise agreements, but
GM considers each Pontiac-Buick-GMC dealership and each Oldsmobile-Cadillac
dealership as single dealerships for restriction purposes. The actual number
of dealership franchises the Company will own under separate Franchise
Agreements is as follows: 4 Ford dealerships; 2 each of Buick, Chevrolet,
GMC, Isuzu, Mazda, Mercury, Mitsubishi and Pontiac dealerships; and 1 each
of Cadillac, Chrysler, Dodge, Honda, Hummer, Jeep, Kia, Nissan, Oldsmobile,
Plymouth and Toyota dealerships.

Saturn has not been included in the table above because the Company expects
to divest the Jay Automotive Group, Inc. Saturn dealership after the
consummation of the Offering, the Merger and the Acquisitions.

Other automobile manufacturers are still developing their policies
regarding public ownership of dealerships. The Company believes that these
policies will continue to change as more dealership groups sell their stock to
the public, and as the established, publicly-owned dealership groups acquire
more franchises. To the extent that new or amended manufacturer policies
restrict the number of dealerships which may be owned by a dealership group, or
the transferability of the Company's common stock, such policies could have a
material adverse effect on the Company.

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24

As a condition to granting their consent to the Acquisitions, the Merger
and this Offering, a number of manufacturers may also impose certain other
restrictions on the Company. In addition to the restrictions described under
"-- Stock Ownership/Issuance Limits; Limitation on Ability to Issue Additional
Equity," these restrictions principally consist of restrictions on (i) certain
material changes in the Company or extraordinary corporate transactions such as
a merger, sale of a material amount of assets or change in the Board of
Directors or management of the Company which could have a material adverse
effect on the manufacturer's image or reputation or could be materially
incompatible with the manufacturer's interests; (ii) the removal of a dealership
general manager without the consent of the manufacturer; and (iii) the use of
dealership facilities to sell or service new vehicles of other manufacturers. If
the Company is unable to comply with these restrictions, the Company generally
must (i) sell the assets of the dealerships to the manufacturer or to a third
party acceptable to the manufacturer, or (ii) terminate the dealership
agreements with the manufacturer. Manufacturers may impose other and more
stringent restrictions in connection with future acquisitions. See
"Business -- Relationships with Manufacturers."

Based on the manufacturers' restrictions known to the Company as of the
date of this Offering, the Company believes that it has significant
opportunities to acquire additional dealerships without exceeding the
manufacturers' policies and restrictions on acquisitions outlined above.

RISKS ASSOCIATED WITH ACQUISITIONS

The automotive retailing industry is considered a mature industry in which
minimal growth is expected in unit sales of new vehicles. Accordingly, the
Company's future growth will depend in large part on its ability to acquire
additional dealerships, profitably expand its complementary businesses, manage
its expansion, control costs in its operations and consolidate acquisitions,
including the Acquisitions, into existing operations. For each acquisition, the
Company will have to review the acquired entity's operations, management
infrastructure and systems and financial controls, and make appropriate
adjustments or complete reorganizations as appropriate. Unforeseen capital and
operating expenses, or other difficulties, complications and delays frequently
encountered in connection with the expansion and integration of acquired
operations could inhibit the Company's growth. The full benefits of a
significant acquisition, including the Acquisitions, will require the
integration of operational, administrative, finance, sales and marketing
organizations, as well as the implementation of appropriate operational,
financial and management systems and controls. There can be no assurance that
the management group will be able to effectively and profitably integrate in a
timely manner each of the businesses included in the Acquisitions or any future
acquisitions, or to manage the combined entity without substantial costs, delays
or other operational or financial problems. The inability of the Company to do
so could have a material adverse effect on the Company's business, financial
condition and results of operations. Additionally, any acquisition, including
the Acquisitions, and the integration of such acquisitions will require
substantial attention from the Company's senior management team. The diversion
of management attention required by the acquisition and integration of multiple
companies, including the Acquisitions, as well as other difficulties that may be
encountered in the transition and integration process, could have an adverse
effect on the revenue and operating results of the Company. There can be no
assurance that the Company will identify suitable acquisition candidates, that
acquisitions will be consummated on acceptable terms or that the Company will be
able to successfully integrate the operations of any acquisitions, including the
Acquisitions.

Acquisitions may also result in significant goodwill and other intangible
assets that are amortized in future years and reduce future stated earnings.
With respect to the Acquisitions and any future acquisitions, if future facts
and circumstances suggest that some or all of the goodwill has been impaired, a
write-off of the applicable goodwill and corresponding charge to earnings would
be recognized in the quarter in which the impairment is identified. Upon
consummation of the Acquisitions and the Merger, an aggregate of $43 million of
goodwill will be recorded, consisting of $37.1 million from the six dealerships
or dealership groups being acquired in the Acquisitions, $1.9 million from the
Collision Centers USA Acquisition and $4.0 million from the South Financial
Acquisition. See "The Acquisitions," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business -- Growth
Strategy."

The Company's balance sheet immediately following the Merger, the Offering
and the Acquisitions will include an amount designated as "goodwill" that
represents 20% of assets and 67% of shareholders' equity.

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25

Goodwill arises when an acquiror pays more for a business than the fair
value of the tangible and separately measurable intangible net assets. GAAP
requires that goodwill and all other intangible assets be amortized over the
period benefited. Management has determined that period to be no less than 40
years.

If management were not to give effect to shorter benefit periods of factors
giving rise to a material portion of the goodwill, earnings reported in periods
immediately following the Acquisitions would be overstated. In later years, the
Company would be burdened by a continuing charge against earnings without the
associated benefit to income valued by management in arriving at the
consideration paid for the business. Earnings in later years could also be
significantly affected if management determines then that the remaining balance
of goodwill was impaired.

Management has reviewed with its independent accountants the allocation of
consideration paid to assets (including goodwill) and liabilities of the
acquired businesses. Management concluded that the anticipated future cash flows
associated with intangible assets recognized in the Acquisitions will continue
indefinitely, and there is no persuasive evidence that any material portion will
dissipate over a period shorter than 40 years.

In addition, the Company's future growth as a result of its acquisition of
automobile dealerships will depend on its ability to obtain the requisite
manufacturer approvals. There can be no assurance that it will be able to obtain
such consents in the future. See "-- Manufacturers' Restrictions on the Merger,
the Acquisitions and Future Acquisitions" and "Business -- Relationships with
Manufacturers."

In certain cases, the Company may be required to file applications and
obtain clearances under applicable federal antitrust laws before consummation of
an acquisition. These regulatory requirements may restrict or delay the
Company's acquisitions, and may increase the cost of completing such
transactions.

STOCK OWNERSHIP/ISSUANCE LIMITS; LIMITATION ON ABILITY TO ISSUE ADDITIONAL
EQUITY

Standard automobile Franchise Agreements limit transfers of any ownership
interests of a dealership and its parent, and therefore often do not by their
terms accommodate public trading of the common stock of a dealership or its
parent. Even if the Company receives all of the relevant manufacturer approvals
to permit the Offering and trading of its common stock, a number of
manufacturers may continue to impose restrictions upon the transferability of
the common stock. For example, Ford may cause the Company to sell or resign from
one or more of its Ford franchises if any person or entity acquires 50% or more
of the Company's voting securities without Ford's approval. Likewise, GM and
Toyota may force the sale of their respective franchises if 20% or more of the
Company's voting securities are so acquired by any one person or entity without
their approval. Honda may force the sale of the Company's Honda franchise if any
person or entity acquires 5% or more of the common stock (10% if such entity is
an institutional investor), and Honda deems such person or entity to be
unsatisfactory. See "Business -- Relationships with Manufacturers."

Any transfer of shares of the common stock, including a transfer by any of
the shareholders of the target companies of the Acquisitions who received the
common stock pursuant to the Acquisitions and shareholders of Boomershine
Automotive who received the Company's common stock pursuant to the Merger, will
be outside the control of the Company. If one or more of such transfers causes a
change in control of the Company, the manufacturers may have the right to
terminate or not renew one or more of the Franchise Agreements. Moreover, these
issuance limitations are likely to impede the Company's ability to raise capital
through additional equity offerings or to issue common stock as consideration
for, and therefore, to consummate, future acquisitions. Such restrictions also
may prevent or deter prospective acquirors from gaining control of the Company
and, therefore, may adversely impact the Company's equity value.

STRIKES AND LABOR ACTIONS; GM STRIKE

Events such as strikes and other labor actions by unions could have a
material adverse effect on the Company's business, financial condition and
results of operations. As of the date of this Prospectus, the United Auto
Workers Union has recently settled a labor action it had initiated in the form
of a strike against GM. This strike has had a material adverse effect on the
production of GM vehicles. Although the Company believes that, as of the date of
this Prospectus, the strike has not had a material adverse effect on the

23
26

operations of the dealerships that will comprise the Company upon the
consummation of the Merger and the Acquisitions, because approximately 24.7% of
the Company's pro forma gross revenues for the nine month period ended March 31,
1998 were derived from GM new vehicles, there can be no assurance that GM's
decreased production will not have a material adverse effect on the Company's
business, financial condition and results of operations in the future.

COMPETITION

The automotive retailing industry is highly competitive with respect to
price, service, location and selection. The Company's competition will include
franchised automotive dealerships selling the same or similar makes of new and
used vehicles offered by the Company in the same markets as the Company and
sometimes at lower prices than those of the Company. These dealer competitors
may be larger and have greater financial and marketing resources than the
Company. The Company will not have any cost advantage in purchasing new vehicles
from manufacturers. Additional competitors include other franchised dealers,
private market buyers and sellers of used vehicles, used vehicle dealers
(including regional and national rental car companies which sell their used
rental cars), service center chains and independent service and repair shops.
The used car market faces increasing competition from non-traditional outlets
such as the Internet and used car "superstores," which use sales techniques such
as one-price shopping. Several groups have begun to establish nationwide
networks of used vehicle superstores, and car superstores operate in several of
the markets in which the Company will operate. "No negotiation" sales methods
are also being tried for new cars by at least one of these superstores and by
Saturn and other dealerships. Some of the Company's competitors may have greater
financial, marketing and personnel resources than the Company. In addition,
certain manufacturers, such as Ford, have publicly announced that they may
directly enter the retail market in the future, and certain other manufacturers,
such as GM, have publicly announced that they may consolidate many of their
dealerships in a given market area into a single large dealership to serve that
particular market. Such actions by the manufacturers could have a material
adverse effect on the Company. The increased popularity of vehicle leasing also
has resulted, as these leases expire, in a large increase in the number of late
model vehicles available in the market, which puts added pressure on new vehicle
prices. As the Company seeks to acquire dealerships in new markets, it may face
increasingly significant competition (including from other large dealer groups
and dealer groups that have publicly-traded equity) as it strives to gain market
share through acquisitions or otherwise.

The Franchise Agreements for the dealerships that the Company owns or
expects to acquire upon consummation of the Offering do not give the Company the
exclusive right to sell a manufacturer's product within a given geographic area.
The Company could be materially adversely affected if any of its manufacturers
award franchises to others in the same markets where the Company is operating. A
similar adverse effect could occur if existing competing franchised dealers
increase their market share in the markets in which the Company will operate.
The Company's gross margins may decline over time if it expands into markets
where it does not have a leading position. These and other competitive pressures
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business -- Competition."

REGIONAL CONCENTRATION

Local economic, competitive and other conditions may affect the performance
of automotive dealerships. As such, the Company's results of operations may be
substantially dependent upon general economic conditions and consumer spending
habits and preferences in the southeastern United States, as well as various
factors specific to that area, such as tax rates and state and local regulation.
Additionally, since the Company's growth strategy contemplates acquisitions in
small and medium-sized markets, any adverse business developments experienced by
businesses which have a disproportionately large presence in, and influence on,
such small and medium-sized markets could have a material adverse effect on the
Company's business, financial condition and results of operations.

ACQUISITION FINANCING; FUTURE CAPITAL REQUIREMENTS; POSSIBLE DILUTION THROUGH
ISSUANCE OF STOCK

The Company currently intends to finance future acquisitions in part by
issuing shares of its common stock as full or partial consideration for acquired
dealerships. The extent to which the Company will be able or

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27

willing to issue common stock for acquisitions will depend on the market value
of the common stock from time to time, the willingness of potential acquisition
candidates to accept common stock as part of the consideration for the sale of
their businesses, and the ability of the Company to obtain any necessary
manufacturers' consents. It is possible that the Company will issue, in the
aggregate, a significant number of additional shares of common stock in
connection with such acquisitions in the future, and the number of shares of
common stock could be as much as, or more than, the number of outstanding shares
of common stock following the Offering. Using stock to consummate acquisitions
may result in significant dilution of shareholders' percentage interest in the
Company. To the extent the Company is unable or unwilling to issue common stock
as consideration for future acquisitions, the Company may be required to use
available cash or other sources of debt or equity financings to finance future
acquisitions. The Company is negotiating a credit facility with various lenders
and anticipates that such a credit facility will provide the Company with a line
of credit of up to $50 million which may be used for future acquisitions.
However, there can be no assurance that other sources of debt or equity
financing, including this credit facility, would be available to the Company on
acceptable terms, or at all, or that the Company's available cash or other
sources of financing will be sufficient to finance such acquisitions. If the
Company is unable or unwilling to issue shares of common stock as consideration
for future acquisitions, or is unable to obtain additional financing in a timely
manner on satisfactory terms, it may be required to postpone or reduce its
acquisition plans, which may have a material adverse effect on the Company's
business, financial condition and results of operation.

FLOORPLAN FINANCING

The Company will depend to a significant extent on its ability to finance
the purchase of inventory, which in the automotive retailing industry involves
significant sums of money in the form of floorplan financing. The Company is
currently negotiating new floorplan financing lines of credit of up to $110
million, although no assurance can be given that the Company will be able to
obtain these new lines of credit on terms acceptable to it. In addition, no
assurance can be given that the Company's working capital, the existing and new
floorplan facilities, and other resources will be sufficient to fund the
Company's floorplan financing needs, or that the Company will be able to obtain
adequate additional capital from other sources. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Company's Credit
and Financing Arrangements" and "Business -- Growth Strategy." The Company
anticipates that such a restructuring of its floorplan financing, and the
Company's prospective size and market presence, will provide it with an
opportunity to negotiate more favorable terms for its floorplan financing.
However, there can be no assurance that the Company will be able to obtain more
favorable floorplan financing, or that such financing will be implemented in a
timely manner. Even if such more favorable floorplan financing is obtained,
there can be no assurance that such financing will not subsequently be adversely
modified, or that other sources of floorplan financing will be available to the
Company in the future. Additionally, substantially all the assets of the
dealerships that the Company owns or expects to acquire upon consummation of the
Offering are pledged to secure floorplan indebtedness, which may impede the
Company's ability to borrow from other sources, and the Company must obtain new
floorplan financing or obtain consents to assume existing financing in
connection with its acquisition of dealerships. See "-- Dependence on Automobile
Manufacturers."

SUB-PRIME AUTOMOBILE FINANCE SUBSIDIARY

The sub-prime consumer automobile finance market is comprised of customers
who are deemed to be relatively high credit risks due to various factors,
including, among other things, the manner in which they have handled previous
credit, the absence or limited extent of their prior credit history and/or their
limited financial resources. Consequently, the installment loans made by South
Financial have a higher probability of delinquency and default and have greater
servicing costs than loans made to other automobile purchasers who pose lesser
credit risks. South Financial's profitability depends in part upon its ability
to properly evaluate the creditworthiness of sub-prime consumers and efficiently
service its loans and the loans it purchases from other automotive dealerships.
There can be no assurance that satisfactory credit performance of a sub-prime
consumer will be maintained or that the rate of future defaults and/or losses
will be consistent with prior experience or at levels that will allow South
Financial to maintain profitability. The ability of most borrowers to remit
payments in accordance with the terms of the loans is dependent on their
continued employment. An

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28

economic downturn resulting in increased unemployment could cause a significant
rise in delinquencies and defaults, which could materially adversely affect
South Financial's business, financial condition and results of operations.
Moreover, increases in the delinquency and/or loss rates in South Financial's
loan portfolio could adversely affect South Financial's ability to obtain or
maintain its financing resources.

South Financial requires substantial borrowings to fund its loans and its
purchases of retail installment contracts from automobile dealerships.
Consequently, South Financial's profitability is affected by the difference, or
"spread," between the rate of interest paid on the funds it borrows and the rate
of interest charged on the loans it makes and on the installment contracts it
purchases, which rate in most states is limited by law. The difference between
South Financial's cost of borrowing versus the average annual percentage rate on
loans it makes or has purchased was 16.9% for 1995, 18.4% for 1996 and 17.4% for
1997. Commencing in February 1997, loans were purchased from dealers at a
discount and on a non-recourse basis to increase the overall effective yield of
the portfolio. Such discount averaged approximately 45% for the year ended
December 31, 1997. The average portfolio yield of South Financial's loans during
the quarter ended March 31, 1998, was 24.3%. This yield was increased by the
amortization of discount income ($52,000) and decreased by the provision for
loan losses ($29,000) resulting in an effective yield of 24.9% for the quarter.
In addition, because the interest rate at which South Financial borrows is
variable and the interest rate at which South Financial makes loans and
purchases retail installment contracts is fixed, South Financial assumes the
risk of interest rate increases prior to the time contracts either mature or are
sold. There can be no assurance that South Financial will be able to extend its
present revolving credit facility or enter into new credit facilities on
reasonable terms in the future or that interest rate increases will not
adversely affect its ability to maintain profitability with respect to the
retail installment contracts it holds.

South Financial is subject to regulation under various federal, state and
local laws and in some jurisdictions is required to be licensed by the state
banking and insurance authorities. States in which South Financial operates
limit the interest rate, fees and other charges that may be imposed by, or
prescribe certain other terms of, the loans South Financial makes and the
contracts that it purchases and restrict its right to repossess and sell
collateral. An adverse change in those laws or regulations could have a material
adverse effect on South Financial's business, financial condition and results of
operations by, among other things, limiting the states in which South Financial
may operate or the interest rate that may be charged on retail installment
contracts or restricting South Financial's ability to realize the value of the
collateral securing the contracts.

COLLISION REPAIR CENTERS

The Company anticipates that much of the growth of its collision repair
business will be achieved through the development of new locations for its
collision repair business; however, the Company to date has not established any
start-up locations of the type anticipated, and there can be no assurance that
the Company will successfully establish any such locations in the near term or
at all. The Company expects that start-up locations may initially have a
negative impact on its results of operations and margins due to several factors,
including: (i) start-up collision repair centers typically require a significant
investment of capital to acquire the necessary equipment and materials and to
establish each start-up location; and (ii) it will generally take some time
following commencement of operations at a start-up location before profitability
can be achieved. There can be no assurance that any start-up location will
become profitable within the first several years of operations, if at all.

The collision repair industry is highly fragmented and is comprised
primarily of independent operators of collision repair centers, against which
the Company expects to compete and among which the Company anticipates
identifying acquisition candidates. The Company also expects its competitors in
the collision repair industry to include franchised operators of collision
repair centers and other companies which operate multiple company-owned
collision repair centers. Some of these competitors may be significantly larger
and have greater financial resources than the Company.

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OPERATING CONDITION OF ACQUIRED BUSINESSES

Although the Company has conducted what it believes to be a prudent level
of investigation regarding the operating condition of the assets to be purchased
in the Acquisitions in light of the circumstances of each transaction, certain
unavoidable levels of risk remain regarding the actual operating condition of
these assets. The same risk regarding the actual operating condition of
businesses to be acquired will also apply to future acquisitions by the Company.
In addition, in connection with the Acquisitions, the Company has executed
certain acquisition agreements which contain limited or qualified
representations and warranties by the target companies and/or the selling
shareholders, monetary and duration limitations on any indemnifications made by
the target companies and/or selling shareholders, or, in some instances, no
indemnifications at all. Moreover, some of the former owners of the businesses
acquired pursuant to the Acquisitions have or will become executive officers
and/or members of the Board of Directors of the Company. See "Management --
Executive Officers and Directors; Key Personnel." Consequently, the Company may
have little or no recourse against the prior owners of the companies acquired in
the Acquisitions in the event of breach of a representation, warranty or
covenant in such acquisition agreements. Any material misrepresentations,
omissions or breaches of covenants could have a material adverse effect on the
Company's business, financial condition or results of operations.

DEPENDENCE ON KEY PERSONNEL AND LIMITED MANAGEMENT AND PERSONNEL RESOURCES

The Company's success will depend to a significant degree upon the
continued contributions of its senior management, particularly Walter M.
Boomershine, Jr., the Company's Chairman, Robert W. Gundeck, the Company's Chief
Executive Officer, Charles K. Yancey, the Company's Chief Operating Officer and
President, Stephen C. Whicker, the Company's Executive Vice President of
Corporate Development, Ricky L. Brown, the Company's Chief Financial Officer,
Alan K. Arnold, the Company's Vice President of Ford Division, and R. Glynn
Wimberly, the Chief Executive Officer of South Financial Corporation. The
Company has employment agreements with each of these employees. Although the
Company does not currently maintain key-man life insurance on any of these
individuals, the Company intends to obtain such insurance on all of these
individuals following the completion of this Offering. The loss of any of said
key employees could have a material adverse effect on the Company's business,
financial condition and results of operation. Additionally, the Franchise
Agreements require the prior approval of the applicable manufacturer before any
change is made in franchise general managers. Consequently, the loss of the
services of one or more of these key employees could have a material adverse
effect on the Company. Although the Company has employment agreements with some
of its key employees, the Company will not have employment agreements in place
for all of its key personnel. The Company does not currently maintain any
key-man life insurance on any member of its management team. In addition, as the
Company expands it may need to hire additional managers and will likely be
dependent on the senior management of any businesses acquired. The market for
qualified employees in the industry and in the regions in which the Company will
operate, particularly for general managers and sales and service personnel, is
highly competitive and may subject the Company to increased labor costs in
periods of low unemployment. The loss of the services of key employees or the
inability to attract additional qualified managers could have a material adverse
effect on the Company. In addition, the lack of qualified management or
employees of potential acquisition candidates may limit the Company's ability to
consummate future acquisitions. See "Business -- Growth Strategy,"
"Business -- Competition" and "Management."

FAILURE TO MEET MANUFACTURER CSI SCORES

Many manufacturers attempt to measure customer satisfaction with dealership
sales, warranty and repair service through a customer satisfaction index which
varies by manufacturer. These manufacturers may use a dealership's CSI scores as
a factor in evaluating applications for additional dealership acquisitions and
other matters such as vehicle inventory allocations. The components of CSI have
been modified from time to time in the past, and there is no assurance that such
components will not be further modified or replaced by different systems in the
future. As of the date of this Prospectus, the Company believes that one of the
dealerships that will be acquired by the Company upon consummation of the
Offering is not in compliance with the applicable manufacturer's CSI
requirements. During the five-year period preceding the date of this

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Prospectus, the Company believes that the dealerships that the Company owns or
expects to acquire upon consummation of the Offering have been in non-compliance
with manufacturers' CSI requirements 13 times, although the Company believes
that none of such dealerships has been adversely affected by such non-
compliance. There can be no assurance that the Company will be able to comply
with such standards in the future. Failure of the dealerships that the Company
owns or expects to acquire upon consummation of the Offering to comply with the
standards imposed by manufacturers at any given time may have a material adverse
effect on the growth and operating strategies of the Company.

HOLDING COMPANY STRUCTURE; RELIANCE ON DIVIDENDS AND OTHER PAYMENTS FROM
OPERATING SUBSIDIARIES

The Company is a holding company, the principal assets of which are the
shares of the capital stock of its subsidiaries. As a holding company without
independent means of generating operating revenue, the Company will depend on
dividends and other payments, including payments of management fees and pursuant
to tax sharing arrangements, from its subsidiaries to fund its obligations and
meet its cash needs.

YEAR 2000 COMPLIANCE

The Company has taken steps to evaluate the extent of its potential year
2000 problems. Some older, or "legacy" computer programs still in use today use
two-digit fields to represent the year in computer records. Such programs may
not properly recognize date-sensitive information when the year changes to 2000
and the systems' two-digit year code changes to "00." Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail. The Company uses financial reporting software that is standard
to the automotive retailing industry and the Company is not certain of the total
exposure it may have as a result of the year 2000 problem. The Company's
software vendors have indicated to the Company that their software is year 2000
compliant. Accordingly, the Company currently does not expect that it will incur
significant operating expenses or be required to invest heavily in computer
system improvements to be year 2000 compliant. However, there can be no
assurance that such software will operate properly once the year 2000 arrives,
and significant uncertainty exists concerning the potential costs and effects
associated with any year 2000 compliance. Any year 2000 compliance problem of
either the Company or its outside vendors, third-party payors or customers could
have a material adverse effect on the Company's business, financial condition
and results of operations.

CYCLICALITY

Sales of automotive vehicles, particularly new vehicles, historically have
been subject to substantial cyclical variation. The Company believes that the
industry is affected by many factors, including general economic conditions,
consumer confidence, the level of personal discretionary spending, prevailing
interest rates and credit availability. There can be no assurance that the
industry will not experience sustained periods of decline in vehicle sales,
particularly new vehicle sales, in the future. Any such decline could have a
material adverse effect on the Company's growth strategy and financial
condition.

IMPORTED PRODUCT RESTRICTIONS AND FOREIGN TRADE RISKS

Certain motor vehicles that will be sold by the Company, as well as certain
major components of vehicles that will be retailed by the Company, are of
foreign origin. Accordingly, the Company will be subject to the import and
export restrictions of various jurisdictions and is dependent to some extent
upon general economic conditions in and political relations with a number of
foreign countries, particularly Japan. Additionally, fluctuations in currency
exchange rates may adversely affect the Company's sales of vehicles produced by
foreign manufacturers. Imports into the United States may also be adversely
affected by increased transportation costs and tariffs, quotas or duties.

ADVERSE EFFECT OF GOVERNMENTAL REGULATION; ENVIRONMENTAL REGULATION COMPLIANCE
COSTS

The Company will be subject to a wide range of federal, state and local
laws and regulations, such as local licensing requirements and consumer
protection laws. See "-- Sub-Prime Automobile Finance Subsidiary" for a
discussion of some of the laws and regulations which impact the operations of
South Financial. The violation of these laws and regulations can result in civil
and criminal penalties being levied against the

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Company or in a cease and desist order against Company operations that are not
in compliance. Future acquisitions by the Company may also be subject to
regulation, including antitrust reviews. The Company believes that it complies
in all material respects with all laws and regulations applicable to its
business, but future regulations may be more stringent and require the Company
to incur significant additional costs to achieve compliance.

The facilities and operations of the dealerships that the Company owns or
expects to acquire upon consummation of the Offering are also subject to
federal, state and local laws and regulations relating to environmental
protection and human health and safety, including those governing wastewater
discharges, air emissions, the operation and removal of underground storage
tanks, the use, storage, treatment, transportation and disposal of solid and
hazardous materials and the remediation of contamination associated with such
disposal. Certain of these laws and regulations may impose joint and several
liability on certain statutory classes of persons for the costs of investigation
or remediation of contaminated properties, regardless of fault or the legality
of the original disposal. These persons include the present or former owner or
operator of a contaminated property and companies that generated, disposed of or
arranged for the disposal of hazardous substances found at the property. Past
and present business operations of the Company subject to such laws and
regulations include the use, storage, handling and contracting for recycling or
disposal of hazardous or toxic substances or wastes, including environmentally
sensitive materials such as motor oil, waste motor oil and filters, transmission
fluid, antifreeze, Freon, waste paint and lacquer thinner, batteries, solvents,
lubricants, degreasing agents, gasoline and diesel fuels. The Company is and
will be subject to other laws and regulations as a result of the past or present
existence of underground storage tanks at many of the properties of the
dealerships that the Company owns or expects to acquire upon consummation of the
Offering. The Company, like many of its competitors, has incurred, and will
continue to incur, capital and operating expenditures and other costs in
complying with such laws and regulations.

Certain laws and regulations, including those governing air emissions and
underground storage tanks, have been amended so as to require compliance with
new or more stringent standards as of future dates. The Company cannot predict
what other environmental legislation or regulations will be enacted in the
future, how existing or future laws or regulations will be administered or
interpreted or what environmental conditions may be found to exist in the
future. Compliance with new or more stringent laws or regulations, stricter
interpretation of existing laws or the future discovery of environmental
conditions may require additional expenditures by the Company, some of which may
be material. See "Business -- Governmental Regulations and Environmental
Matters."

ANTI-TAKEOVER PROVISIONS

Certain provisions of the Company's Articles of Incorporation ("Articles")
and Bylaws may make it more difficult for shareholders of the Company to effect
certain corporate actions. For example, the Company's Articles and Bylaws
provide that special meetings of the shareholders may only be called by the
Chairman, Chief Executive Officer or Secretary of the Company, by a majority
vote of the Board of Directors, or upon written demand of the holders of at
least 75% of all votes entitled to be cast on any issue proposed to be
considered at such meeting. The Company's Bylaws provide that shareholders
seeking to bring business before an annual meeting of shareholders, or to
nominate candidates for election as directors at annual or special meetings of
shareholders, must provide timely notice thereof in writing. Additionally, the
Company's Bylaws incorporate the fair-price protections promulgated by Sections
14-2-1110 through 14-2-1113 and 14-2-1131 through 14-2-1133 of the Georgia
Business Corporation Code (the "GBCC"), which provide certain protections to
minority shareholders by imposing certain requirements on business combinations
of the Company with any interested shareholders of the Company beneficially
holding more than 10% of the Company's voting shares. See "Description of
Capital Stock -- Georgia Law, Certain Articles and Bylaw Provisions and Certain
Franchise Agreement Provisions." The agreements, corporate documents and laws
described above, as well as provisions of the Franchise Agreements described in
"-- Dependence on Automobile Manufacturers" and "-- Stock Ownership/Issuance
Limits; Limitation on Ability to Issue Additional Equity" above (permitting
manufacturers to terminate such agreements upon a change of control) and
provisions of the Company's lending arrangements described in "-- Stock
Ownership/Issuance Limits; Limitation on Ability to Issue Additional Equity"
above (creating an event of default thereunder upon a

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change in control), may have the effect of delaying or preventing a change in
control of the Company or preventing shareholders from realizing a premium on
the sale of their shares of common stock upon an acquisition of the Company.

The Articles authorize the Board of Directors of the Company to issue,
without shareholder approval, up to 50 million shares of "blank check" preferred
stock with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. The issuance of such preferred stock
could adversely affect the voting power or other rights of the holders of the
common stock. Under certain circumstances, the Company could also issue such
preferred stock as a method of discouraging, delaying or preventing a change in
control of the Company. The issuance of preferred stock could also prevent
shareholders from realizing a premium upon the sale of their shares of common
stock upon an acquisition of the Company. Although the Company has no present
intention to issue any shares of its preferred stock, there can be no assurance
that the Company will not do so in the future. See "Description of Capital
Stock -- Preferred Stock." Additionally, the Company's Articles and Bylaws
provide that the Board of Directors is divided into three classes serving
staggered terms. These and other provisions may impair the shareholders' ability
to influence or control the Company or to effect a change in control of the
Company, and may prevent shareholders from realizing a premium on the sale of
their shares of common stock upon an acquisition of the Company. See
"Description of Capital Stock."

POTENTIAL CONFLICTS OF INTEREST

The Company has with respect to certain of the Acquisitions and will likely
in the future enter into transactions with entities controlled by affiliates of
the Company. The Company believes that the Acquisitions were entered into on
terms that reflect arm's-length negotiations and are on terms that are no less
favorable than those that could be obtained from non-affiliated parties. None of
the officers, directors and principal shareholders of the targets were
affiliates of the Company at the time such Acquisitions were negotiated and all
such individuals were represented by independent legal and financial advisors
throughout such negotiations. The consideration payable by the Company to the
Boomershine Automotive shareholders in connection with the Merger was determined
based upon negotiations between the Company's management and the Boomershine
Automotive shareholders. In determining the value of the Merger, the Company
took into account a number of factors, including the projected value of the
Company following an initial public offering, the key role Boomershine
Automotive would play in funding certain of the Company's start-up activities
and in providing key management and employees, and the value of the Boomershine
Automotive name and reputation in the Atlanta market, although no third party
valuation or appraisal of the operations or assets of Boomershine Automotive was
obtained. The number of shares of common stock to be issued in connection with
the Merger was based on an assumed initial public offering price of $10 per
share, the mid point of the estimated offering price range, and assumes a
discount of 10%, which reflects the stock's trading restrictions. At the time of
the Merger, Walter M. Boomershine, Jr. was a director, officer and shareholder
of both Sunbelt and Boomershine Automotive and Charles K. Yancey was a director
and officer of both Sunbelt and Boomershine Automotive. Since no independent
appraisals evaluating the Merger were obtained, there can be no assurance that
the Merger is on terms that could have been obtained from unaffiliated third
parties. Potential conflicts of interest could also arise in the future between
the Company and these affiliated parties in connection with the enforcement,
amendment or termination of these arrangements. The Company anticipates
renegotiating its leases with all related parties at lease expiration at fair
market rentals, which may be higher than current rents. See "Certain
Transactions." In the future, all material transactions which may involve a
potential or actual conflict of interest will be reviewed by disinterested
members of the Board of Directors of the Company to ensure the fairness of such
transactions.

Under Title 14 of the GBCC generally, a transaction effected or proposed to
be effected by a corporation (or a subsidiary of the corporation or any other
entity in which the corporation has a controlling interest) respecting which a
director of the corporation has a conflicting interest is deemed a conflicting
interest transaction. Accordingly, the GBCC provides certain disclosures and
procedures for appropriate directors' actions and shareholders' actions when
dealing with a conflicting interest transaction. Further, under general Georgia
corporate law, a corporate insider is precluded from acting on a business
opportunity in his individual capacity if that opportunity is one which the
corporation is financially able to undertake, is in the line of the

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corporation's business, is of practical advantage to the corporation and is one
in which the corporation has an interest or reasonable expectancy.

NO PRIOR PUBLIC MARKET FOR COMMON STOCK AND POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the common
stock. The initial public offering price of the common stock will be determined
by negotiations among the Company and representatives of the Underwriters. See
"Underwriting" for a discussion of factors considered in determining the initial
public offering price. There can be no assurance that the market price of the
common stock prevailing at any time after this Offering will equal or exceed the
initial public offering price or that an active trading market will be developed
after the Offering or, if developed, that it will be sustained. Quarterly and
annual operating results of the Company, variations between such results and the
results expected by investors and analysts, and changes in local or general
economic conditions or developments affecting the automotive retailing industry,
the Company or its competitors, as well as other factors common to initial
public offerings, could cause the market price of the common stock to fluctuate
substantially. In addition, the stock market has, from time to time, experienced
extreme price and volume fluctuations, which could adversely affect the market
price for the common stock without regard to the financial performance of the
Company.

DILUTION

Purchasers of common stock in the Offering will experience immediate and
substantial dilution in the amount of $7.89 per share in net tangible book value
per share from the initial offering price. See "Dilution."

DIVIDENDS

The Company has no present intention to declare or pay cash dividends after
the Offering. The Company intends to retain any earnings that it may realize in
the future to finance its acquisitions and operations. The payment of any future
dividends will be subject to the discretion of the Board of Directors of the
Company and will depend upon the Company's results of operations, financial
position and capital requirements, general business conditions, restrictions
imposed by financing arrangements, if any, legal restrictions on the payment of
dividends, and other factors the Board of Directors deems relevant. The
Franchise Agreements with vehicle manufacturers generally require the
maintenance of adequate levels of capitalization by the Company or its
prospective dealerships, which also could restrict the Company's ability to pay
dividends. See "Dividend Policy."

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK

Sales of substantial amounts of common stock into the public market
subsequent to the Offering could have a material adverse effect on the market
price of the common stock. Upon consummation of the Merger, the Acquisitions and
the Offering, the Company will have 10,557,862 shares of common stock
outstanding (11,382,862 shares if the Underwriters' over-allotment option is
exercised in full). Of these shares, the 5,500,000 shares offered hereby will be
freely tradable without restriction or further registration under the Securities
Act of 1933, as amended (the "Securities Act"), except for shares held by
persons deemed to be "affiliates" of the Company or acting as "underwriters," as
those terms are defined in the Securities Act. Of the remaining shares of common
stock outstanding, the 3,800,160 shares to be issued to the Boomershine
Automotive shareholders upon consummation of the Merger, the 249,202 shares
issued to executive officers of the Company and the 6,000 shares issued to the
founders of the Company will be "restricted securities" within the meaning of
Rule 144 under the Securities Act and will be eligible for resale subject to
volume, manner of sale, holding period and other limitations of Rule 144. The
1,002,500 shares of common stock to be issued upon consummation of the
Acquisitions will likewise be subject to Rule 144, but the holders of some of
the shares have been granted piggyback registration rights under the terms of
the applicable Acquisition agreements.

The Company has also made certain commitments to issue additional shares of
common stock. The Company may be required to issue shares to the former
shareholders of Wade Ford and Day's Chevrolet under

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price protection provisions set forth in the applicable Acquisition agreements.
See "Description of Capital Stock -- Registration Rights and Stock Price
Protection." Upon issuance, all of said shares will be subject to Rule 144. The
Company has also reserved 1,592,000 shares of common stock for issuance under
stock options granted under the Incentive Stock Plan prior to or
contemporaneously with the completion of the Offering, 653,000 shares of common
stock for issuance under stock options which may be granted under the Incentive
Stock Plan subsequent to this Offering and 50,000 shares of common stock for
issuance upon exercise of warrants granted to a consulting firm for services
rendered in connection with this Offering. In addition, the Company has reserved
5,000 shares of common stock for issuance under stock options granted in
connection with the Collision Centers USA acquisition. See
"Management -- Incentive Stock Plan," "Shares Eligible for Future Sale" and
"Description of Capital Stock -- Warrants." The Company intends to file a
registration statement on Form S-8 with the Commission following completion of
the Offering to register the shares of common stock issuable under the Incentive
Stock Plan.

No prediction can be made as to the effect that resale of shares of common
stock, or the availability of shares of common stock for resale, will have on
the market price of the common stock prevailing from time to time. The resale of
substantial amounts of common stock, or the perception that such resales may
occur, could materially and adversely affect prevailing market prices for the
common stock and the ability of the Company to raise equity capital in the
future. The Company, its executive officers and directors, and the holders of
the Company's unregistered common stock have agreed, subject to certain
exceptions, (i) not, directly or indirectly, without the prior written consent
of the Underwriter, to sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise dispose of
any shares of common stock of the Company, options or warrants to acquire shares
of common stock, or securities exchangeable or exercisable for or convertible
into shares of common stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Exchange Act) by such person,
or publicly announce such person's intention to do any of the foregoing, until
after the close of trading on the date 180 days after the date of this
Prospectus; and (ii) to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of shares of common
stock or securities convertible into or exchangeable or exercisable for common
stock held by such person except in compliance with the foregoing restrictions;
provided that the Company may sell shares of common stock to a third party as
consideration for the Company's acquisition from such third party of an
automobile dealership, so long as such third party executes a lock up agreement
on substantially the same terms described above for a period expiring 180 days
after the date of this Prospectus. See "Management -- Incentive Stock Plan,"
"Shares Eligible for Future Sale" and "Underwriting."

PRICE PROTECTION PROVISIONS

Pursuant to certain stock price protection provisions and/or agreements
entered into in connection with the Wade Ford Acquisition and the Day's
Chevrolet Acquisition, the Company may be required to pay additional
consideration up to an approximate aggregate amount of $9.8 million -- in the
form of cash and/or the Company's common stock -- to the shareholders of those
acquisition target companies. See "Description of Capital Stock -- Registration
Rights and Stock Price Protection."

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements relating to,
among other things, future results of operations, growth plans, sales, capital
requirements and general industry and business conditions applicable to the
Company. These forward-looking statements are based largely on the Company's
current expectations and are subject to a number of risks and uncertainties
which include, but are not limited to, those set forth above. Actual results
could differ materially from those implied by these forward-looking statements.
Important factors to consider in evaluating such forward-looking statements
include, but are not limited to, changes in external competitive market factors,
changes in the Company's business strategy or an inability to execute its
strategy due to unanticipated changes in the Company's industry or the economy
in general and various competitive factors that may prevent the Company from
competing successfully in existing or new markets.

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THE MERGER

Sunbelt Automotive Group, Inc. was incorporated under the GBCC on December
17, 1997. Contemporaneously with the closing date of the Offering, Boomershine
Automotive will merge into the Company via a tax-free reorganization under
Section 368(a)(1)(A) of the Internal Revenue Code and the GBCC (the "Merger").
Upon consummation of the Merger: (i) Boomershine Automotive will be merged with
and into the Company; (ii) the Boomershine Automotive shareholders will receive
an aggregate of 3,800,160 shares of unregistered common stock of the Company in
exchange for the issued and outstanding capital stock of Boomershine Automotive;
and (iii) the Company expects to employ the following shareholders of
Boomershine Automotive in the stated positions: Walter M. Boomershine,
Jr. -- Chairman of the Board and Senior Vice President; Walter M. Boomershine,
III -- employee of the Company; Lindsey B. Robertson -- employee of the Company;
and Patrice B. Mitchell -- employee of the Company. All of the common stock that
the Company expects to issue in connection with the Merger will be subject to
certain restrictions affecting the sale, pledge, offer, contract to sell or
purchase, or the sale or purchase of options on such common stock for a period
of 180 days following the date of this Prospectus. See "Shares Eligible for
Future Sale" and "Underwriting."

Boomershine Automotive was formed in 1992 as a holding company to own and
operate the various Boomershine Automotive dealerships throughout the
metropolitan Atlanta area. Prior to the Merger, Boomershine Automotive owned and
operated nine franchised automobile dealerships in the metropolitan Atlanta
area, including Pontiac, Buick, GMC and Hummer franchises located in Smyrna,
Georgia; Nissan, Ford and Isuzu dealerships in the Gwinnett Mall area of Duluth,
Georgia; a Honda dealership in Cartersville, Georgia; and a Mitsubishi
dealership in Kennesaw, Georgia (North Atlanta). Boomershine Automotive also
owned a collision repair center which served the Gwinnett County area and the
Boomershine Ford and Isuzu dealerships and which is now one of the four
collision repair centers of the Company's Collision Centers USA subsidiary.

THE ACQUISITIONS

Since November 1997, the Company or Boomershine Automotive, as the
Company's predecessor in interest, has consummated or signed definitive
agreements to purchase six additional dealerships or dealership groups, three
collision repair centers and one automotive sub-prime finance company for an
aggregate purchase price of approximately $67 million. These Acquisitions
consist of the Collision Centers USA Acquisition (consummated December 18,
1997), the South Financial Acquisition (consummated January 6, 1998), the Bill
Holt Acquisition (consummated June 15, 1998), the Grindstaff Acquisition
(consummated July 31, 1998), the Robertson Acquisition, the Wade Ford
Acquisition, the Jay Automotive Group Acquisition, and the Day's Chevrolet
Acquisition (the "Acquisitions"). The closing of the Offering is contingent upon
the Company consummating the Robertson, Wade Ford, Jay Automotive and Day's
Chevrolet Acquisitions, and the Company intends to use a portion of the proceeds
from the Offering to pay the cash purchase prices of these remaining
Acquisitions. See "Use of Proceeds." All of the common stock that the Company
expects to issue in connection with the Acquisitions will be subject to certain
restrictions affecting the sale, pledge, offer, contract to sell or purchase, or
the sale or purchase of options on such common stock for a period of 180 days
following the date of this Prospectus. See "Shares Eligible for Future Sale" and
"Underwriting."

The Jay Automotive Group Acquisition. On January 5, 1998, the Company
entered into a definitive agreement to acquire from James G. Stelzenmuller, III,
all of the outstanding stock of Jay Automotive Group, Inc., which owns and
operates Toyota, Mazda, Pontiac, Buick, GMC and Mitsubishi dealerships in
Columbus, Georgia (the "Jay Automotive Group Acquisition"). The Jay Automotive
Group Acquisition is expected to be consummated simultaneously with the closing
of this Offering. The Company will pay $16.0 million in consideration for the
Jay Automotive Group Acquisition. At the closing, the Company will pay $12.0
million in cash, and $4.0 million in the form of a 90-day promissory note (the
"Jay Note") with an interest rate equal to 8% per annum. Mr. Stelzenmuller will
serve as an employee of the Company upon consummation of the Offering. Jay
Automotive Group, Inc. will continue to lease the real properties on which its
facilities are located from the respective landlords of each property. The
purchase price for the Jay

33
36

Automotive Group Acquisition includes payment for the acquisition of Saturn and
Suzuki dealerships, which the Company expects to divest subsequent to the
consummation of the Offering. See "Business -- Facilities."

The Wade Ford Acquisition. On November 21, 1997, the Company entered into
a definitive agreement to acquire from Alan K. Arnold, Gary R. Billings and
certain other shareholders all of the outstanding common stock of the Wade Ford
Dealerships, located in Smyrna and Buford, Georgia, respectively (the "Wade Ford
Acquisition"). The Wade Ford Acquisition is expected to be consummated
simultaneously with the closing of this Offering. The Company will pay
approximately $15.5 million in consideration for the Wade Ford Acquisition. At
the closing, the Company will pay to the selling shareholders approximately
$12.0 million in cash and approximately $3.5 million in the form of unregistered
common stock of the Company, plus or minus consideration to be determined by
closing and post-closing adjustments. If the Wade Ford Dealerships earn a profit
during the period from January 1, 1998 to the closing date, then the Company
shall pay the selling shareholders the entire amount of such profit less any
distributions made by the Wade Ford Dealerships to the selling shareholders
during such period. If the Wade Ford Dealerships incur a loss during the period
from January 1, 1998 to the closing date, the purchase price will be reduced by
such amount. If the aggregate cash accounts of the Wade Ford Dealerships amount
to less than $800,000, the purchase price will be reduced dollar for dollar by
the deficiency. Additionally, if the Wade Ford Dealerships' floor plan liability
exceeds their floor plan assets by more than 3%, the purchase price will be
reduced by such amount. Approximately $367,000 of the cash and approximately
$133,000 of common stock will be held in escrow until the expiration of certain
indemnification provisions made by the selling shareholders of the Wade Ford
Dealerships. The Company will also provide certain piggyback registration rights
to the selling shareholders of the Wade Ford Dealerships, along with certain
stock price protection pursuant to which the Company will compensate the
shareholders for any deficiencies in the price of the stock consideration on the
first anniversary of the Offering. See "Description of Capital
Stock -- Registration Rights and Stock Price Protection." In connection with the
Wade Ford Acquisition, Mr. Arnold and Mr. Billings will each execute
non-competition and confidentiality agreements. Mr. Arnold, who has over 20
years of experience in the automotive retailing industry, will continue to serve
as the Executive Manager of Wade Ford pursuant to an employment agreement and
will join the Company as a director and as the Vice President in charge of the
Ford Division. Mr. Billings, who has over 35 years of experience in the
automotive retailing industry, will continue to serve as the Executive Manager
of Wade Ford Buford. The Wade Ford Dealerships will continue to lease the real
properties on which their facilities are located from the respective landlords
of each property. See "Business -- Facilities" and "Certain
Transactions -- Certain Dealership Leases."

Day's Chevrolet Acquisition. On March 3, 1998, the Company entered into a
definitive agreement to acquire from Calvin Diemer and Alvin Diemer all of the
outstanding common stock of Day's Chevrolet, Inc. ("Day's Chevrolet"), located
in Acworth, Georgia (the "Day's Chevrolet Acquisition"). The Day's Chevrolet
Acquisition is expected to be consummated simultaneously with the closing of
this Offering. The Company will pay approximately $10.8 million in consideration
for the Day's Chevrolet Acquisition. At the closing, the Company will pay to the
selling shareholders approximately $5.6 million in cash and approximately $5.2
million in the form of unregistered common stock of the Company, plus or minus
additional consideration to be determined by post-closing adjustments. If Day's
Chevrolet made pre-1998 distributions, then the purchase price shall be reduced
by such excess. The purchase price will be further adjusted, to the extent that
the closing date net worth is greater or less than zero. Additionally, if Day's
Chevrolet's floor plan liability exceeds their floor plan assets by more than
3%, the purchase price shall be reduced by such amount. The Company will also
provide certain stock price protection to the selling shareholders of Day's
Chevrolet pursuant to which the Company will compensate the selling shareholders
for any deficiencies in the price of the stock consideration on the second
anniversary of the Offering. See "Description of Capital Stock -- Registration
Rights and Stock Price Protection." In connection with the Day's Chevrolet
Acquisition, Mr. Calvin Diemer, who has over 20 years of experience in the
automotive retailing industry, will execute a non-competition and
confidentiality agreement and will continue to serve as the Executive Manager of
Day's Chevrolet pursuant to an employment agreement. Day's Chevrolet will
continue to lease the real property on which its facilities are located from the
landlord of said property. See "Business -- Facilities."

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37

The Grindstaff Acquisition. On July 31, 1998, the Company acquired from
Steve E. Grindstaff and Wes Hambrick all of the outstanding common stock of
Grindstaff, Inc., a Tennessee corporation, which operates Chevrolet, Chrysler,
Plymouth, Dodge, Jeep and Kia dealerships in Elizabethton, Tennessee (the
"Grindstaff Acquisition"). The Company paid approximately $8.5 million in
consideration for the Grindstaff Acquisition in the form of a promissory note
which carries an interest rate of 8 3/4% per annum, matures on the earlier of
the consummation date of this Offering or September 4, 1998, and is subject to
certain post-closing adjustments. If the net income of Grindstaff, Inc. for the
period from January 1, 1998 to June 30, 1998 is less than $927,944, then the
selling shareholders shall pay the entire amount of such deficiency to the
Company. If the net income of Grindstaff, Inc. for that period is greater than
$927,944, then the Company shall pay the entire amount of such excess to the
selling shareholders. Upon the satisfaction of the promissory note, $500,000 of
the principal amount will be held in escrow until the expiration of certain
indemnification provisions made by the selling shareholders of Grindstaff, Inc.
In connection with the promissory note, the Company has pledged to the selling
shareholders of Grindstaff, Inc., pursuant to a pledge agreement, all of the
common stock of Grindstaff, Inc. that the Company acquired in the Grindstaff
Acquisition. In connection with the Grindstaff Acquisition, Mr. Grindstaff
executed a non-competition and confidentiality agreement. Mr. Wes Hambrick, who
has over 15 years of experience in the automotive retailing industry, will
continue to serve as the Executive Manager of Grindstaff, Inc. pursuant to an
employment agreement. Grindstaff, Inc. will continue to lease the real property
on which its facilities are located from the landlord of said property. See
"Business -- Facilities."

The Robertson Acquisition. On March 1, 1998, the Company entered into a
definitive agreement to acquire from E. Moss Robertson, Jr. all of the
outstanding common stock of Robertson Oldsmobile-Cadillac, Inc. ("ROC"), which
operates Oldsmobile, Cadillac, Isuzu and Mazda dealerships in Gainesville,
Georgia (the "Robertson Acquisition"). The Robertson Acquisition is expected to
be consummated simultaneously with the closing of this Offering. The purchase
price for the Robertson Acquisition will be determined by adding the FIFO net
worth of ROC on the closing date to $4.7 million in accordance with the
agreement. Based on the March 31, 1998 FIFO net worth of ROC, the Company would
pay approximately $8.1 million in consideration for the Robertson Acquisition
consisting of approximately $360,000 in the form of unregistered common stock of
the Company and approximately $7.7 million in cash. Mr. Robertson is the son-
in-law of Mr. Walter M. Boomershine, Jr. (the Senior Vice President and Chairman
of the Company) and the spouse of Lindsey B. Robertson, a shareholder of
Boomershine Automotive. See "The Merger." The Company will also provide certain
piggyback registration rights to the selling shareholder with respect to the
unregistered common stock. See "Description of Capital Stock -- Registration
Rights and Stock Price Protection." In connection with the Robertson
Acquisition, Mr. Robertson, who has over 20 years of experience in the
automotive retailing industry, will execute a non-competition and
confidentiality agreement and will continue to serve as the Executive Manager of
ROC pursuant to an employment agreement. ROC will continue to lease the real
property on which its facilities are located from the landlord of said property,
and the Company will guaranty said lease. See "Business -- Facilities" and
"Certain Transactions -- Certain Dealership Leases."

The Bill Holt Acquisition. On June 15, 1998, the Company acquired
substantially all of the operating assets, and assumed certain liabilities, of
Hones, Inc. d/b/a Bill Holt Ford Mercury, a North Carolina corporation which
operates Ford and Mercury dealerships in Franklin, North Carolina (the "Bill
Holt Acquisition"). The Company paid for the Bill Holt Acquisition consideration
in an amount equal to approximately $750,000 in cash and assumed the outstanding
balance of the floorplan liability for new vehicles of Hones, Inc. actually
acquired by the Company, as determined in accordance with the terms of the
definitive agreement. In connection with the Bill Holt Acquisition, Mr. Bill
Holt, who was the sole shareholder of Hones, Inc. prior to this Offering,
executed a non-competition and confidentiality agreement. An unrelated third
party acquired the real property on which its facilities are located, and the
Company will continue to lease said real property from such landlord. See
"Business -- Facilities."

The South Financial Acquisition. On January 6, 1998, Boomershine
Automotive acquired from Thomas F. Murphy, Jr. all of the outstanding capital
stock of South Financial Corporation, a Florida corporation that owns and
operates five standalone sub-prime automotive finance offices located in
Florida, Tennessee and

35
38

North Carolina (the "South Financial Acquisition"). The purchase price of South
Financial Corporation was approximately $4.6 million, which was paid in cash at
the time of closing. In connection with the South Financial Acquisition, Mr.
Murphy executed a non-competition and confidentiality agreement. Upon the
consummation of this transaction, R. Glynn Wimberly became chief executive
officer of South Financial Corporation pursuant to an employment agreement
between Mr. Wimberly and South Financial Corporation. Mr. Wimberly has 24 years
of experience in the consumer finance industry and has served as the president
and general manager of an automotive sub-prime finance company for the past five
years. The Company anticipates that future sites for South Financial
Corporation's outlets will be located in or near existing and future
Company-owned dealerships. The South Financial Acquisition further implements
the Company's growth strategy by adding a higher-margin complementary business
to its core automotive retailing operations.

The Collision Centers USA Acquisition. On December 18, 1997, Boomershine
Automotive acquired from James L. Peters all of the outstanding capital stock of
Southlake Collision Center, Inc., Southlake Collision Henry County, Inc. and
Southlake Collision Cobb Parkway, Inc. (collectively, the "Collision Centers"),
which own and operate stand-alone automobile collision repair centers located in
Clayton County, Henry County and Cobb County, Georgia, respectively (the
"Collision Centers USA Acquisition"). The purchase price for the Collision
Centers, in the aggregate, was $1.7 million, one-half of which was paid in cash,
and the balance of which was paid in the form of promissory notes (each, the
"Collision Note," and collectively, the "Collision Notes") with an interest rate
equal to 18% per annum. In connection with the Collision Centers USA
Acquisition, Mr. Peters also received options to purchase 5,000 shares of common
stock of the Company at an exercise price of $8.00 per share, the fair value of
which was included in the purchase price allocation. Mr. Peters' options are not
subject to any lock-up provisions. One of the Collision Notes has been paid and
satisfied and the other note matured on June 30, 1998. The Company is currently
negotiating with Mr. Peters to extend the maturity date of such note to
September 15, 1998, at which time the Company intends to satisfy the remaining
Collision Note with funds from its working capital. In connection with the
Collision Centers USA Acquisition, Mr. Peters executed a non-competition and
confidentiality agreement, and Mr. Peters and Collision Centers USA entered into
an employment agreement pursuant to which Mr. Peters became Vice President of
Collision Centers USA. Collision Centers USA will continue to lease the real
properties on which its facilities are located from the respective landlords of
each property. See "Business -- Facilities." All collision centers owned by the
Company are operated by the Company's subsidiary, Collision Centers USA, Inc.
under the name "Collision Centers USA." The acquisition of these three
companies, along with the Company's acquisition of an additional collision
repair center by virtue of the Merger, further implements the Company's growth
strategy by adding a higher-margin complementary business with geographic
proximity to the Company's existing automobile dealerships. Additionally, the
Collision Centers USA Acquisition will enhance the Company's cross-selling
capabilities by ensuring a continued demand for, and increased sales of, parts
and supplies from nearby Company-owned dealerships.

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39

USE OF PROCEEDS

The net proceeds to the Company from the sale of 5,500,000 shares of common
stock offered hereby are estimated to be approximately $48.2 million
(approximately $55.8 million if the Underwriters' over-allotment option is
exercised in full), assuming an initial public offering price of $10.00 per
share and after deducting the underwriting discount and estimated expenses of
the Offering. The net proceeds of this Offering, along with cash in the
businesses to be merged into or acquired by the Company (amounting to an
aggregate of approximately $19.7 million at March 31, 1998), will be used to pay
the cash portion of the purchase price for the Acquisitions in the aggregate
amount of approximately $47 million, subject to post-closing adjustments, and
the balance of the proceeds, if any, will be used for working capital and other
general corporate purposes. The Company regularly reviews opportunities to
further its business strategy through acquisitions of automotive dealerships and
other businesses that it believes are complementary to the Company's current and
planned operations. The Company, however, has no present commitments, agreements
or understandings with respect to any acquisitions other than the Acquisitions.

DIVIDEND POLICY

The Company intends to retain all of its earnings to finance the growth and
development of its business, including future acquisitions, and does not
anticipate paying any cash dividends on its common stock for the foreseeable
future. Any future change in the Company's dividend policy will be made at the
discretion of the Board of Directors of the Company and will depend upon the
Company's operating results, financial condition, capital requirements, general
business conditions and such other factors as the Board of Directors deems
relevant. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" and "Description of
Capital Stock."

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CAPITALIZATION

The following table sets forth, as of March 31, 1998, the capitalization of
the Company (i) on an actual basis, reflecting only the capitalization of
Boomershine Automotive, the accounting acquiror, as of March 31, 1998, (ii) on a
pro forma basis, as adjusted to reflect the Merger and the Acquisitions, and
(iii) on a pro forma as adjusted basis to reflect the Offering and the
application of the net proceeds therefrom to be received by the Company. See
"The Acquisitions" and "Use of Proceeds." This table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Pro Forma Combined and Condensed Financial Data"
included elsewhere in this Prospectus.

AS OF MARCH 31, 1998
------------------------------------------
PRO FORMA AS
ACTUAL(1) PRO FORMA(2) ADJUSTED(3)
------------ ------------ ------------
(IN THOUSANDS)

Short-term debt:
Floorplan notes payable................................ $49,918 $114,013 $114,013
Notes payable and other................................ 18,726 23,590 23,590
Current maturities of long-term debt................... 1,921 2,159 2,159
------- -------- --------
Total short-term debt.................................... 70,565 139,762 139,762
Long-term debt, less current maturities.................. 360 837 837
Shareholders' equity:
Class A voting common stock, no par value; 500,000
shares authorized; 72,000 shares issued and
outstanding actual; no shares issued and outstanding
pro forma and pro forma as adjusted................. 3,974 -- --
Common stock, $0.001 par value, 450,000,000 shares
authorized, no shares issued and outstanding actual;
4,808,660 shares issued and outstanding pro forma;
and 10,308,660 shares issued and outstanding pro
forma as adjusted(4)................................ -- 5 10
Preferred stock, $0.001 par value, 50,000,000 shares
authorized, no shares issued or outstanding......... -- -- --
Additional paid-in capital............................. -- 12,993 61,138
Retained earnings...................................... 5,266 4,656 4,656
------- -------- --------
Total shareholders' equity..................... 9,240 17,654 65,804
------- -------- --------
Total capitalization........................... $80,165 $158,253 $206,403
======= ======== ========

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

(1) Includes the Collision Centers USA Acquisition and South Financial
Acquisition which were completed by Boomershine Automotive prior to March
31, 1998.
(2) Adjusted to give effect to 6,000 shares of common stock issued to founders
of the Company prior to March 31, 1998. Also, adjusted to give effect to
3,800,160 shares of common stock issued in connection with the Merger.
Adjusted to give effect to the items in (1) above, and the issuance of
1,002,500 shares of common stock in connection with the Acquisitions. See
"Pro Forma Combined and Condensed Financial Data."
(3) Adjusted to give effect to the items in (2) above and the Offering. See "Pro
Forma Combined and Condensed Financial Data."

(4) Does not reflect the possible exercise of options to purchase 2,250,000
shares of common stock reserved for issuance under the Company's Incentive
Stock Plan, including options to purchase 5,000 shares of common stock
issued to James E. Peters in connection with the Collision Centers USA
Acquisition, 425,000 shares of common stock issued to executive officers in
January 1998, 850,000 shares of common stock issued to executive officers in
April 1998, and 317,000 shares of common stock to be issued to executive
officers and employees on the effective date of the Offering. See
"Management -- Incentive Stock Plan." Also does not reflect the possible
issuance of 50,000 shares of common stock reserved for issuance upon the
exercise of warrants granted to a consulting firm for services rendered in
connection with this Offering.

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DILUTION

The pro forma net tangible book value of the Company (after giving effect
to the Merger, the Collision Centers USA Acquisition, and the South Financial
Acquisition) as of March 31, 1998 was $0.55 per share of common stock. Pro forma
net tangible book value per share is determined by dividing the pro forma
tangible net worth of the Company (pro forma total assets less goodwill less pro
forma total liabilities) by the total number of then outstanding shares of
common stock. After giving effect to the Acquisitions and the sale of the
5,500,000 shares of common stock offered hereby and the receipt of an assumed
$48.2 million of net proceeds from the Offering (based on an assumed Offering
price of $10.00 per share and net of the underwriting discounts and estimated
offering expenses), pro forma net tangible book value of the Company at March
31, 1998 would have been $21.7 million, or $2.11 per share. This represents an
immediate increase in pro forma net tangible book value of $1.56 per share to
existing shareholders and an immediate dilution of $7.89 per share to the new
investors purchasing shares of common stock in the Offering. The following table
illustrates the per share dilution:

Initial public offering price per share..................... $10.00
Pro forma net tangible book value per share before
giving effect to the dealership Acquisitions and the
Offering.............................................. 0.55
Increase in pro forma tangible book value per share
attributable to the dealership Acquisitions and the
Offering.............................................. 1.56
----
Pro forma as adjusted net tangible book value per share
after the Offering........................................ 2.11
------
Dilution per share to new investors......................... $ 7.89
======

The following table sets forth, on a pro forma basis as of March 31, 1998,
the number of shares of common stock purchased from the Company, the total
consideration paid to the Company and the average price per share paid to the
Company by existing shareholders and new investors purchasing shares from the
Company in the Offering (before deducting underwriting discounts and commissions
and estimated offering expenses):

TOTAL AVERAGE
SHARES PURCHASED CONSIDERATION PRICE
---------------------- --------------------- PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ----------- ------- -------

Existing shareholders(1)............ 3,806,160 36.9% $ 3,982,704 5.9% $ 1.05
Acquisition shareholders(2)......... 1,002,500 9.7 9,022,500 13.3 9.00
New investors(3).................... 5,500,000 53.4 55,000,000 80.8 10.00
---------- ----- ----------- -----
10,308,660 100.0% $68,005,204 100.0% $ 6.60
========== ===== =========== =====

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

(1) Includes 3,800,160 shares issued in connection with the Merger and 6,000
shares of common stock issued to the founders of the Company. Does not
reflect the 249,202 shares of common stock issued to executive officers of
the Company subsequent to March 31, 1998 or possible exercise of options to
purchase 2,250,000 shares of common stock reserved for issuance under the
Company's Incentive Stock Plan, including options to purchase: 5,000 shares
of common stock granted to James E. Peters in connection with the Collision
Centers USA Acquisition; 425,000 shares of common stock granted to executive
officers in January 1998; 850,000 shares of common stock granted to
executive officers in April 1998 and 317,000 shares of common stock that
will be granted immediately before the completion of the Offering with an
exercise price equal to the initial public offering price. See
"Management -- Incentive Stock Plan" and "The Merger." Also excludes 50,000
shares of common stock reserved for issuance upon exercise of warrants
granted to a consulting firm for services rendered in connection with this
Offering. See "Description of Capital Stock -- Warrants."

(2) Includes shares issued in connection with the Acquisitions. The
consideration paid assumes a discount of 10%, which reflects the stock's
trading restriction. See "The Acquisitions."

(3) Assumes that the Underwriters' over-allotment option is not exercised. Sales
pursuant to the full exercise by the Underwriters of the over-allotment
option will cause the total number of shares purchased by new investors,
total consideration paid by new investors and percent of total consideration
paid by new investors to increase to 6,325,000, $63,250,000 and 82.9%,
respectively.

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SELECTED FINANCIAL DATA

The Company will acquire six automotive dealerships or dealership groups
prior to or simultaneously with the consummation of the Offering. See "The
Acquisitions." For financial statement presentation purposes, Boomershine
Automotive has been identified as the accounting acquiror. The following
selected historical consolidated financial data of Boomershine Automotive as of
June 30, 1996 and 1997 and for each of the three years in the period ended June
30, 1997, have been derived from the audited financial statements of Boomershine
Automotive included elsewhere in this Prospectus. The following selected
historical financial data for Boomershine Automotive as of June 30, 1993, 1994
and 1995 and for each of the two years in the period ended June 30, 1994 and as
of March 31, 1998 and for the nine months ended March 31, 1997 and March 31,
1998, have been derived from the unaudited financial statements of Boomershine
Automotive, which have been prepared on the same basis as the audited financial
statements and, in the opinion of Boomershine Automotive, reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of such data. The results of operations for interim periods
are not necessarily indicative of results that may be expected for a full year
or any other interim periods. In connection with the FIFO Conversion, and in
accordance with generally accepted accounting principles, the Summary Historical
and Pro Forma Financial Data has been retroactively restated to reflect the FIFO
Conversion by Boomershine Automotive. The pro forma data for the year ended June
30, 1997, as of March 31, 1998 and the nine months ended March 31, 1998 give
effect to the Merger, the Acquisitions and the Offering. See "Pro Forma Combined
and Condensed Financial Data." The following selected financial data should be
read in conjunction with the Consolidated Financial Statements of Boomershine
Automotive, including the notes thereto, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," appearing elsewhere
herein.

NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
---------------------------------------------------------------- -------------------------------
HISTORICAL(1) HISTORICAL(1)
---------------------------------------------------- PRO FORMA ------------------- PRO FORMA
1993 1994 1995 1996 1997 1997(2) 1997 1998 1998(2)
-------- -------- -------- -------- -------- --------- -------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
Revenues:
Vehicle sales:
New..................... $ 73,912 $110,674 $156,955 $166,199 $152,625 $420,019 $113,239 $113,340 $315,697
Used.................... 35,747 46,207 57,047 64,652 61,811 177,925 47,318 39,517 127,126
Parts and service......... 15,085 17,679 19,223 23,764 24,637 66,602 17,689 19,108 50,159
Finance, commissions and
other revenues.......... 1,858 3,717 5,095 8,278 8,372 23,423 6,514 6,701 17,308
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total revenues...... 126,602 178,277 238,320 262,893 247,445 687,969 184,760 178,666 510,290
Cost of sales............... 112,680 159,676 215,646 235,828 222,352 612,273 165,705 158,328 453,299
-------- -------- -------- -------- -------- -------- -------- -------- --------
Gross profit................ 13,922 18,601 22,674 27,065 25,093 75,696 19,055 20,338 56,991
Selling, general and
administrative expenses... 12,751 16,685 19,927 24,170 22,263 62,935 16,698 16,544 48,137
Depreciation and
amortization.............. 428 410 406 600 889 2,550 659 764 1,984
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income from operations...... 743 1,506 2,341 2,295 1,941 10,211 1,698 3,030 6,870
Interest expense, net....... 587 598 1,436 1,774 2,230 3,331 1,408 1,544 1,923
Interest income............. 144 119 218 181 120 516 184 247 699
Other income (expense),
net....................... 98 (110) 60 13 44 (240) (80) (68) 100
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before income
taxes..................... 398 917 1,183 715 (125) 7,156 394 1,665 5,746
Income tax (expense)
benefit................... (151) (450) (448) (213) 40 (3,109) (119) (398) (2,481)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net income (loss)........... $ 247 $ 467 $ 735 $ 502 $ (85) $ 4,047 $ 275 $ 1,267 $ 3,265
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic:
Net income per share(3)... $ 0.39 $ 0.32
======== ========
Weighted average shares
outstanding(3).......... 10,309 10,309
======== ========
Fully diluted:
Net income per share(3)... $ 0.38 $ 0.31
======== ========
Weighted average shares
outstanding(3).......... 10,648 10,648
======== ========

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AS OF JUNE 30,(1) AS OF MARCH 31, 1998
----------------------------------------------- ----------------------------
1993 1994 1995 1996 1997 HISTORICAL(1) PRO FORMA(2)
------- ------- ------- ------- ------- ------------- ------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital................................ $ 5,829 $ 6,509 $ 5,872 $ 5,588 $ 5,885 $ 760 $ 18,202
Inventories.................................... 22,307 25,551 46,407 50,231 39,553 47,733 115,923
Total assets................................... 30,777 35,983 65,263 69,649 55,672 88,949 223,045
Total debt, including current portion.......... 20,204 24,152 50,106 53,520 40,618 70,925 140,599
Total shareholders' equity..................... 6,263 6,730 7,465 8,059 7,973 9,240 65,804

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

(1) In connection with the Merger and the Offering, Boomershine Automotive
converted from the LIFO Method of inventory accounting to the specific
identification method of inventory accounting, conditioned upon the closing
of the Offering. In connection with the FIFO Conversion, and in accordance
with generally accepted accounting principles, the accompanying financial
information of Boomershine Automotive has been retroactively restated to
reflect the FIFO Conversion.
(2) Adjusted to give pro forma effect to (i) the Merger and (ii) the
Acquisitions. See "Pro Forma Combined and Condensed Financial Data." Also
gives effect to the sale of the shares offered hereby and the application of
the net proceeds therefrom. See "Use of Proceeds."
(3) Historical net income per share is not presented, as the historical capital
structure of Boomershine Automotive prior to the Merger, the Acquisitions
and the Offering is not comparable with the capital structure that will
exist subsequent to these events. The weighted average shares outstanding
was calculated taking into account these events as if they had occurred at
the beginning of each period. See "Pro Forma Combined and Condensed
Financial Data."

41
44

PRO FORMA COMBINED AND CONDENSED FINANCIAL DATA

The following unaudited pro forma combined and condensed statements of
operations for the year ended June 30, 1997 and for the nine months ended March
31, 1998 reflect the historical accounts of the Company and Boomershine
Automotive for those periods, adjusted to give pro forma effect to the Merger,
the Acquisitions and the Offering, as if these events had occurred at July 1,
1996. The following unaudited pro forma consolidated balance sheet as of March
31, 1998 reflects the historical accounts of the Company and Boomershine
Automotive as of that date adjusted to give pro forma effect to the Merger, the
Acquisitions and the Offering as if these events had occurred on March 31, 1998.
The pro forma combined and condensed financial data give effect to the Merger
whereby the Company will acquire Boomershine Automotive contemporaneously with
the consummation of this Offering. For financial statement purposes, Boomershine
Automotive has been identified as the accounting acquiror, as it will hold the
single largest voting interest subsequent to the Acquisitions in accordance with
SAB No. 97. The Acquisitions will be consummated on or before the closing of the
Offering and are precedent to the closing of the Offering. The Acquisitions that
have been consummated are as follows: Southlake Collision Center, Inc.,
Southlake Collision Henry County, Inc. and Southlake Collision Cobb Parkway,
Inc., which was consummated on December 18, 1997 for consideration of
approximately $1.7 million; South Financial Corporation, which was consummated
on January 6, 1998 for consideration of approximately $4.65 million; Hones, Inc.
d/b/a Bill Holt Ford Mercury, which was consummated on June 15, 1998 for
consideration of approximately $750,000. The Acquisitions that the Company
anticipates closing upon the consummation of this Offering are as follows: Jay
Automotive Group, Inc., for consideration estimated for pro forma purposes to be
approximately $16.0 million; Wade Ford, Inc. and Wade Ford Buford, Inc., for
consideration estimated for pro forma purposes to be approximately $15.5
million; Day's Chevrolet, for consideration estimated for pro forma purposes to
be approximately $10.8 million; Grindstaff, Inc., for consideration estimated
for pro forma purposes to be approximately $9.1 million (which was consummated
on July 31, 1998); and Robertson Oldsmobile-Cadillac, Inc., for consideration
estimated for pro forma purposes to be approximately $8.1 million. For pro forma
purposes, the purchase price amounts that were estimated above were calculated
as of March 31, 1998 and include estimates of closing date adjustments that will
ultimately be settled at closing. Each of the Acquisitions will be accounted for
using the purchase method of accounting. The pro forma financial data also give
effect to the initial public offering of 5,500,000 common shares of the Company.
See also "The Merger", "The Acquisitions", and "Use of Proceeds" included
elsewhere in the Prospectus. Boomershine Automotive will convert to the specific
identification method of inventory accounting for new and used vehicles
conditioned and effective upon the closing of the Offering. In connection with
the FIFO Conversion, and in accordance with generally accepted accounting
principles, the accompanying financial information of Boomershine Automotive has
been retroactively restated to reflect the FIFO Conversion.

The pro forma combined and condensed financial data and accompanying notes
should be read in conjunction with the financial statements and related
footnotes of Sunbelt Automotive Group, Inc.; Boomershine Automotive Group, Inc.;
Jay Automotive Group, Inc.; Grindstaff, Inc.; Wade Ford, Inc. and Wade Ford
Buford, Inc.; Robertson Oldsmobile-Cadillac, Inc.; Day's Chevrolet, Inc.; and
South Financial Corporation, all of which are included elsewhere in the
Prospectus. The Company believes that the assumptions used in the following
statements provide a reasonable basis on which to present the pro forma
financial data. The pro forma combined financial data are provided for
informational purposes only and should not be construed to be indicative of the
Company's financial condition or results of operations had the transactions and
events described above been consummated on the dates assumed, and are not
intended to project the Company's financial condition on any future date or its
results of operation for any future period.

42
45

PRO FORMA COMBINED AND CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 1997

THE MERGER THE ACQUISITIONS(9)
------------------------- ---------------------------------------------
WADE FORD,
SUNBELT BOOMERSHINE JAY INC. AND
AUTOMOTIVE AUTOMOTIVE AUTOMOTIVE WADE FORD
GROUP, INC. GROUP, INC. GROUP, INC. GRINDSTAFF, INC. BUFORD, INC.
----------- ----------- ----------- ---------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues:
Vehicle sales:
New.................................... $ -- $152,625 $56,365 $33,525 $118,324
Used................................... -- 61,811 28,425 19,500 25,634
Parts and service........................ -- 24,637 11,667 3,681 8,988
Finance, commission and other revenues... -- 8,372 2,811 2,615 1,854
------ -------- ------- ------- --------
Total revenues..................... -- 247,445 99,268 59,321 154,800
Cost of sales............................. -- 222,352 87,678 52,189 142,458
------ -------- ------- ------- --------
Gross profit.............................. -- 25,093 11,590 7,132 12,342
Selling, general and administrative
expenses................................. -- 22,263 9,288 6,329 10,433
Depreciation and amortization............. -- 889 246 86 154
------ -------- ------- ------- --------
Income from operations.................... -- 1,941 2,056 717 1,755
Interest expense, net..................... -- 2,230 434 516 260
Interest income........................... -- 120 97 103 23
Other income (expense), net............... -- 44 -- (532) 242
------ -------- ------- ------- --------
Income (loss) before income taxes......... -- (125) 1,719 (228) 1,760
Income tax (expense) benefit.............. -- 40 (653) 14 --
------ -------- ------- ------- --------
Net income (loss)......................... $ -- $ (85) $ 1,066 $ (214) $ 1,760
====== ======== ======= ======= ========
Basic:
Net income per share(8)..................
Weighted average shares outstanding(8)...
Fully diluted:
Net income per share(8)..................
Weighted average shares outstanding(8)...

THE ACQUISITIONS(9)
--------------------------------------------------------------------------

ROBERTSON DAY'S SOUTH
OLDSMOBILE- CHEVROLET, FINANCIAL BILL HOLT COLLISION
CADILLAC, INC. INC. CORPORATION(11) FORD MERCURY CENTERS USA
-------------- ---------- --------------- ------------ -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues:
Vehicle sales:
New.................................... $11,157 $27,415 $ -- $20,608 $ --
Used................................... 6,914 23,308 -- 12,333 --
Parts and service........................ 2,581 10,034 -- 1,652 3,362
Finance, commission and other revenues... 272 1,376 5,437 686 --
------- ------- ------ ------- ------
Total revenues..................... 20,924 62,133 5,437 35,279 3,362
Cost of sales............................. 18,045 55,742 1,245 31,679 2,256
------- ------- ------ ------- ------
Gross profit.............................. 2,879 6,391 4,192 3,600 1,106
Selling, general and administrative
expenses................................. 2,034 4,947 3,435 2,958 1,122
Depreciation and amortization............. 59 140 63 139 --
------- ------- ------ ------- ------
Income from operations.................... 786 1,304 694 503 (16)
Interest expense, net..................... 61 133 248 296 10
Interest income........................... 171 2 -- -- --
Other income (expense), net............... (2) 8 -- -- --
------- ------- ------ ------- ------
Income (loss) before income taxes......... 894 1,181 446 207 (26)
Income tax (expense) benefit.............. -- -- (376) -- --
------- ------- ------ ------- ------
Net income (loss)......................... $ 894 $ 1,181 $ 70 $ 207 $ (26)
======= ======= ====== ======= ======
Basic:
Net income per share(8)..................
Weighted average shares outstanding(8)...
Fully diluted:
Net income per share(8)..................
Weighted average shares outstanding(8)...

PRO FORMA
ADJUSTMENTS
FOR THE
ACQUISITIONS PRO FORMA
------------ ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues:
Vehicle sales:
New.................................... $ -- $420,019
Used................................... -- 177,925
Parts and service........................ -- 66,602
Finance, commission and other revenues... -- 23,423
------- --------
Total revenues..................... -- 687,969
Cost of sales............................. (1,371)(1) 612,273
------- --------
Gross profit.............................. 1,371 75,696
Selling, general and administrative
expenses................................. 126 (2) 62,935
Depreciation and amortization............. 999 (3) 2,550
(225)(4)
------- --------
Income from operations.................... 471 10,211
Interest expense, net..................... (121)(5) 3,331
(736)(6)
Interest income........................... -- 516
Other income (expense), net............... -- (240)
------- --------
Income (loss) before income taxes......... 1,328 7,156
Income tax (expense) benefit.............. (2,134)(7) (3,109)
------- --------
Net income (loss)......................... $ (806) $ 4,047
======= ========
Basic:
Net income per share(8).................. $ 0.39
========
Weighted average shares outstanding(8)... 10,309
========
Fully diluted:
Net income per share(8).................. $ 0.38
========
Weighted average shares outstanding(8)... 10,648
========

43
46

PRO FORMA COMBINED AND CONDENSED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED MARCH 31, 1998

THE MERGER THE ACQUISITIONS(9)
----------------------------- ---------------------------------------------
WADE FORD,
SUNBELT BOOMERSHINE JAY INC. AND
AUTOMOTIVE AUTOMOTIVE AUTOMOTIVE WADE FORD
GROUP, INC. GROUP, INC.(10) GROUP, INC. GRINDSTAFF, INC. BUFORD, INC.
----------- --------------- ----------- ---------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues:
Vehicle sales:
New................................... $ -- $113,340 $39,947 $24,024 $ 92,848
Used.................................. -- 39,517 23,456 12,187 18,939
Parts and service....................... -- 19,108 8,956 3,050 7,143
Finance, commission and other
revenues.............................. -- 6,702 2,269 2,031 1,953
------ -------- ------- ------- --------
Total revenues...................... -- 178,667 74,628 41,292 120,883
Cost of sales............................ -- 158,329 65,808 35,665 111,665
------ -------- ------- ------- --------
Gross profit............................. -- 20,338 8,820 5,627 9,218
Selling, general
and administrative
expenses................................ 611 16,544 7,067 5,307 7,487
Depreciation and amortization............ -- 764 158 184 103
------ -------- ------- ------- --------
Income (loss) from operations............ (611) 3,030 1,595 136 1,628
Interest expense, net.................... -- 1,544 174 300 131
Interest income.......................... -- 247 78 3 246
Other income (expense), net.............. -- (68) 1 102 34
------ -------- ------- ------- --------
Income (loss) before income taxes........ (611) 1,665 1,500 (59) 1,777
Income tax (expense) benefit............. -- (398) (570) 3 --
------ -------- ------- ------- --------
Net income (loss)........................ $ (611) $ 1,267 $ 930 $ (56) $ 1,777
====== ======== ======= ======= ========
Basic:
Net income per share(8).................
Weighted average shares
outstanding(8)........................
Fully diluted:
Net income per share(8).................
Weighted average shares
outstanding(8)........................

THE ACQUISITIONS(9)
-----------------------------------------------------------------------
PRO FORMA
ROBERTSON DAY'S SOUTH BILL HOLT COLLISION ADJUSTMENTS
OLDSMOBILE- CHEVROLET, FINANCIAL FORD CENTERS FOR THE
CADILLAC, INC. INC. CORPORATION(11) MERCURY USA(12) ACQUISITIONS
-------------- ---------- --------------- --------- ----------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues:
Vehicle sales:
New................................... $ 9,508 $21,914 $ -- $14,116 $ -- $ --
Used.................................. 6,549 15,076 -- 11,402 -- --
Parts and service....................... 2,140 6,880 -- 1,343 1,539 --
Finance, commission and other
revenues.............................. 370 1,170 2,321 492 -- --
------- ------- ------ ------- ------ -------
Total revenues...................... 18,567 45,040 2,321 27,353 1,539 --
Cost of sales............................ 16,257 40,298 624 24,450 1,139 (936)(1)
------- ------- ------ ------- ------ -------
Gross profit............................. 2,310 4,742 1,697 2,903 400 936
Selling, general
and administrative
expenses................................ 1,417 3,804 2,362 2,654 620 264 (2)
Depreciation and amortization............ 43 103 33 60 24 706 (3)
(194)(4)
------- ------- ------ ------- ------ -------
Income (loss) from operations............ 850 835 (698) 189 (244) 160
Interest expense, net.................... 56 58 68 233 5 (94)(5)
(552)(6)
Interest income.......................... 123 2 -- -- -- --
Other income (expense), net.............. (9) 14 -- 26 -- --
------- ------- ------ ------- ------ -------
Income (loss) before income taxes........ 908 793 (766) (18) (249) 806
Income tax (expense) benefit............. -- -- 279 -- -- (1,795)(7)
------- ------- ------ ------- ------ -------
Net income (loss)........................ $ 908 $ 793 $ (487) $ (18) (249) $ (989)
======= ======= ====== ======= ====== =======
Basic:
Net income per share(8).................
Weighted average shares
outstanding(8)........................
Fully diluted:
Net income per share(8).................
Weighted average shares
outstanding(8)........................

PRO FORMA
---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues:
Vehicle sales:
New................................... $315,697
Used.................................. 127,126
Parts and service....................... 50,159
Finance, commission and other
revenues.............................. 17,308
--------
Total revenues...................... 510,290
Cost of sales............................ 453,299
--------
Gross profit............................. 56,991
Selling, general
and administrative
expenses................................ 48,137
Depreciation and amortization............ 1,984
--------
Income (loss) from operations............ 6,870
Interest expense, net.................... 1,923
Interest income.......................... 699
Other income (expense), net.............. 100
--------
Income (loss) before income taxes........ 5,746
Income tax (expense) benefit............. (2,481)
--------
Net income (loss)........................ $ 3,265
========
Basic:
Net income per share(8)................. $ 0.32
========
Weighted average shares
outstanding(8)........................ 10,309
========
Fully diluted:
Net income per share(8)................. $ 0.31
========
Weighted average shares
outstanding(8)........................ 10,648
========

44
47

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

(1) Reflects the conversion of Jay Automotive, Grindstaff, Wade Ford,
Robertson, Day's Chevrolet and Bill Holt from the LIFO Method of inventory
accounting to the FIFO Method. Under the FIFO Method, cost of sales would
have been lower by $1,371,000, and $936,000 for the year ended June 30,
1997, and the nine months ended March 31, 1998, respectively. The Company
intends to convert all acquisitions to the FIFO Method conditioned and
effective upon the closing of the Offering.
(2) Reflects the Company's estimate of the net deductions from selling, general
and administrative expenses which would have occurred if the Acquisitions
and the Offering had been effected as of the beginning of each period and
consists of the following:

YEAR ENDED NINE MONTHS ENDED
JUNE 30, 1997 MARCH 31, 1998
------------- ------------------
(IN THOUSANDS)

(i) Reduction and/or elimination of salaries to owners and
other officers whose positions and salaries will be
eliminated or contractually reduced in conjunction
with the Offering..................................... $(919) $(498)
(ii) Increase in salaries of existing and new officers who
have entered into employment agreements with the
Company, effective prior to or upon consummation of
the Offering.......................................... 673 556
(iii) Additional costs related to the long-term lease rental
of real estate, on which certain of the dealerships
are located........................................... 372 206
----- -----
$ 126 $ 264
===== =====

(3) Reflects amortization as if Jay Automotive, Grindstaff, Wade Ford,
Robertson, Day's Chevrolet, Bill Holt, Collision Centers and South
Financial had been acquired as of July 1, 1996. The pro forma amortization
for the year ended June 30, 1997 and the nine months ended March 31, 1998
reflects additional amortization of approximately $999,000 and $706,000,
respectively, associated with intangible assets resulting from the
Acquisitions. Such costs are being amortized over a 40-year period.
(4) Reflects the reduction of depreciation related to the elimination of
certain property and equipment of Bill Holt in the amount of $1,034,000,
with useful lives ranging from 3 to 20 years, that was not acquired in
connection with the Bill Holt Acquisition. The pro forma depreciation
expense for the year ended June 30, 1997 and the nine months ended March
31, 1998 reflects a reduction $225,000 and $194,000, respectively.
(5) The net reduction in interest expense was calculated based on the
elimination of approximately $1.5 million in long-term debt of Bill Holt,
bearing an interest rate of 7%, that was not acquired in connection with
the Bill Holt Acquisition, and a $273,000 mortgage of Day's Chevrolet,
bearing an interest rate of 7.5%, relating to land and buildings that were
dividended to the owners in contemplation of the Day's Chevrolet
Acquisition. The pro forma interest expense for the year ended June 30,
1997 and the nine months ended March 31, 1998 reflects a reduction $121,000
and $94,000, respectively.
(6) Reflects the reduction in interest expense associated with the reduction of
interest rate on approximately $84 million in floorplan notes payable
assumed from several of the Acquisitions from their contractual rates,
which generally range from 7.25% to 9.75%, to the contractual rate of
Boomershine Automotive of 7.73%, which will become effective in conjunction
with the Merger. The Company has received a commitment for an additional
$60 million floorplan note.
(7) Certain of the Acquisitions are S-Corporations and accordingly not subject
to federal and certain state income taxes during the periods indicated.
This adjustment reflects the federal and state income taxes as if all
entities were C-Corporations based on a 43% effective rate assumed during
the period. The assumed effective tax rate reflects, as additional pro
forma permanent differences, non-taxable goodwill amortization.
(8) Pro forma basic net income per share is based upon the assumption that
10,308,660 shares of common stock are outstanding for each period. This
amount represents the 5,500,000 shares to be issued in the Offering, the
3,806,160 shares of common stock owned by the Company's shareholders
immediately following the Merger, and the 1,002,500 shares of common stock
to be issued in connection with the Acquisitions. Fully diluted net income
per share includes all basic shares plus 339,524 shares of common stock
equivalents for options granted or to be granted as of March 31, 1998.
(9) The historical accounts and related footnotes of the Acquisitions included
elsewhere in the Prospectus were prepared based on a fiscal year end of
December 31. To conform with Boomershine Automotive's fiscal year end of
June 30, the unaudited pro forma statements of operations include financial
data for each acquisition for the same periods presented for Boomershine
Automotive.

45
48

(10) Reflects the Collision Centers USA Acquisition on December 18, 1997 and the
South Financial Acquisition on January 6, 1998 from the date of acquisition
by Boomershine Automotive. Includes revenues of $2.4 million and net income
before tax of $62,000 related to Collision Centers USA and South Financial
from the date of acquisition to March 31, 1998.
(11) Includes the results of South Financial for the period from July 1, 1997 to
acquisition by Boomershine Automotive on January 6, 1998. Also includes an
adjustment from historical records of South Financial to reclassify amounts
previously reported as operating expenses to cost of sales. These amounts
are directly associated with the generation of finance revenues of South
Financial.
(12) Includes the results of Collision Centers USA for the period from July 1,
1997 to acquisition by Boomershine Automotive on December 18, 1997.

46
49

PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1998

THE ACQUISITIONS
THE MERGER ------------------------------
---------------------------------------------
SUNBELT BOOMERSHINE PRO FORMA JAY
AUTOMOTIVE AUTOMOTIVE ADJUSTMENTS AUTOMOTIVE
GROUP, INC. GROUP, INC.(6) FOR THE MERGER GROUP, INC. GRINDSTAFF, INC.
----------- -------------- -------------- ----------- ----------------
(IN THOUSANDS)

Current Assets:
Cash and cash equivalents......................... $ 3 $ 4,717 $ -- $ 4,073 $ 722
Accounts receivable, net.......................... 7,883 (611)(7) 1,701 972
Finance receivables, net.......................... 13,495
Notes receivable shareholder......................
Inventories....................................... 47,733 17,317 8,331
Deferred income taxes............................. 1,459 12
Prepaid expenses and other current assets......... 2,256 73 38
----- ------- ------- ------- -------
Total Current Assets........................ 3 77,543 (611) 23,164 10,075
Property and equipment, net........................ 4,413 809 1,146
Intangible assets, net............................. 6,537 313
Notes receivable shareholder....................... 754
Deferred income taxes.............................. 17
Other assets....................................... 439 66 84
----- ------- ------- ------- -------
Total Assets................................ $ 3 $88,949 $ (611) $24,352 $12,059
===== ======= ======= ======= =======
Current Liabilities:
Floor plan notes payable.......................... $ -- $49,918 $ -- $13,707 $ 9,543
Senior debt....................................... 11,471
Current maturities of long-term debt.............. 1,921 60 178
Dealer finance reserves........................... 307
Notes payable -- other............................ 7,255
Income taxes payable..............................
Deferred income taxes............................. 959
Accrued liabilities............................... 2,593 1,120 582
Accounts payable.................................. 611 2,359 (611)(7) 1,206 471
----- ------- ------- ------- -------
Total Current Liabilities................... 611 76,783 (611) 16,093 10,774
Long-term debt, less current maturities............ 360 119 308
Income taxes payable............................... 2,209
Other liabilities.................................. 357
Shareholders' Equity:
Common stock...................................... 3,974 (3,974)(7) 100
4 (7)
Additional paid-in capital........................ 3 3,970 (7) 948
Owner's equity.................................... 8,140
Note receivable...................................
Retained earnings................................. (611) 5,266 (71)
----- ------- ------- ------- -------
Total Shareholders' Equity.................. (608) 9,240 -- 8,140 977
----- ------- ------- ------- -------
Total Liabilities and Shareholders'
Equity..................................... $ 3 $88,949 $ (611) $24,352 $12,059
===== ======= ======= ======= =======

THE ACQUISITIONS
----------------------------------------------------
WADE FORD BILL PRO FORMA
INC. AND ROBERTSON DAY'S HOLT ADJUSTMENTS
WADE FORD OLDSMOBILE- CHEVROLET, FORD FOR THE
BUFORD, INC. CADILLAC, INC. INC. MERCURY ACQUISITIONS
------------ -------------- ---------- ------- ------------

Current Assets:
Cash and cash equivalents......................... $ 6,001 $2,100 $ 1,448 $ 451 $(45,213)(1)
(1,201)(2)
Accounts receivable, net.......................... 4,434 377 836 604 (604)(2)
Finance receivables, net..........................
Notes receivable shareholder...................... 515 (515)(1)
Inventories....................................... 17,472 2,997 7,787 5,303 33 (2)
8,950 (3)
Deferred income taxes.............................
Prepaid expenses and other current assets......... 326 45 5 152 (152)(2)
------- ------ ------- ------ --------
Total Current Assets........................ 28,748 5,519 10,076 6,510 (38,702)
Property and equipment, net........................ 514 46 272 1,309 (1,034)(2)
Intangible assets, net............................. 25 106 43,704 (1)
275 (2)
(8,950)(3)
2,087 (4)
Notes receivable shareholder....................... (754)(1)
Deferred income taxes..............................
Other assets....................................... 70 322 40 (40)(2)
------- ------ ------- ------ --------
Total Assets................................ $29,357 $5,671 $10,670 $7,859 $ (3,414)
======= ====== ======= ====== ========
Current Liabilities:
Floor plan notes payable.......................... $24,121 $2,613 $ 8,975 $5,136 $ --
Senior debt.......................................
Current maturities of long-term debt..............
Dealer finance reserves...........................
Notes payable -- other............................ 864 4,000 (1)
Income taxes payable.............................. 522 (4)
Deferred income taxes.............................
Accrued liabilities............................... 1,270 104 265 96 (96)(2)
Accounts payable.................................. 220 303 230 40 (40)(2)
------- ------ ------- ------ --------
Total Current Liabilities................... 26,475 3,020 9,470 5,272 4,386
Long-term debt, less current maturities............ 50 2,209 (2,209)(2)
Income taxes payable............................... 1,565 (4)
Other liabilities..................................
Shareholders' Equity:
Common stock...................................... 179 5 110 320 (393)(1)
(320)(2)
Additional paid-in capital........................ 100 145 32 (1,228)(1)
9,023 (1)
Owner's equity.................................... (8,140)(1)
Note receivable...................................
Retained earnings................................. 2,553 2,501 1,058 58 (6,040)(1)
(58)(2)
------- ------ ------- ------ --------
Total Shareholders' Equity.................. 2,832 2,651 1,200 378 (7,156)
------- ------ ------- ------ --------
Total Liabilities and Shareholders'
Equity..................................... $29,357 $5,671 $10,670 $7,859 $ (3,414)
======= ====== ======= ====== ========

PRO FORMA
ADJUSTMENTS
FOR THE
OFFERING PRO FORMA
----------- ---------

Current Assets:
Cash and cash equivalents......................... $ 48,150(5) $ 21,251
Accounts receivable, net.......................... 15,592
Finance receivables, net.......................... 13,495
Notes receivable shareholder......................
Inventories....................................... 115,923
Deferred income taxes............................. 1,471
Prepaid expenses and other current assets......... 2,743
-------- --------
Total Current Assets........................ 48,150 170,475
Property and equipment, net........................ 7,475
Intangible assets, net............................. 44,097
Notes receivable shareholder.......................
Deferred income taxes.............................. 17
Other assets....................................... 981
-------- --------
Total Assets................................ $ 48,150 $223,045
======== ========
Current Liabilities:
Floor plan notes payable.......................... $ -- $114,013
Senior debt....................................... 11,471
Current maturities of long-term debt.............. 2,159
Dealer finance reserves........................... 307
Notes payable -- other............................ 12,119
Income taxes payable.............................. 522
Deferred income taxes............................. 959
Accrued liabilities............................... 5,934
Accounts payable.................................. 4,789
-------- --------
Total Current Liabilities................... -- 152,273
Long-term debt, less current maturities............ 837
Income taxes payable............................... 3,774
Other liabilities.................................. 357
Shareholders' Equity:
Common stock...................................... 5(5) 10
Additional paid-in capital........................ 48,145(5) 61,138
Owner's equity....................................
Note receivable...................................
Retained earnings................................. 4,656
-------- --------
Total Shareholders' Equity.................. 48,150 65,804
-------- --------
Total Liabilities and Shareholders'
Equity..................................... $ 48,150 $223,045
======== ========

47
50

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

(1) Reflects the preliminary allocation of the aggregate purchase price of the
Acquisitions, other than the Bill Holt acquisition, based on the estimated
fair value of the net assets acquired. Because the carrying amount of the
net assets acquired, which primarily consist of accounts receivable,
inventory, property, plant and equipment and floorplan indebtedness,
approximates their fair value, management believes the application of
purchase price accounting will not result in an adjustment to the carrying
amount of those net assets. Under the acquisition agreements, the negotiated
purchase prices for the Acquisitions will be adjusted to the extent that the
fair value of the tangible net assets as of the closing is different than an
agreed upon amount. The owners of Wade Ford, the Robertson dealerships and
Day's Chevrolet will receive 385,000, 40,000 and 577,500 shares of
restricted common stock, respectively, based on an assumed initial public
offering price of $10.00. The holders of restricted stock issued in payment
of the Acquisitions have agreed not to offer, sell or otherwise dispose of
any of those shares for a period of one year after the Offering. The fair
value based on discounted present value of these shares reflects this
restriction. The amount of goodwill and the corresponding amortization
actually recorded may ultimately be different from the amounts estimated
here, depending upon the actual fair value of tangible net assets acquired
at closing of the Acquisitions. The estimated purchase price allocation
consists of the following (in thousands):

JAY WADE FORD, INC. ROBERTSON
AUTOMOTIVE GRINDSTAFF, AND WADE OLDSMOBILE- DAY'S
GROUP, INC. INC. FORD BUFORD, INC. CADILLAC, INC. CHEVROLET TOTAL
----------- ----------- ----------------- -------------- --------- --------

Estimated total consideration:
Cash.................................. $12,000 $ 9,128 $12,054 $ 7,711 $ 5,589 $ 46,482
Promissory note issued................ 4,000 -- -- -- -- 4,000
Restricted stock issued............... -- -- 3,465 360 5,198 9,023
------- ------- ------- ------- ------- --------
Total........................... 16,000 9,128 15,519 8,071 10,787 59,505
Less book value of tangible assets
acquired.............................. (7,827) (977) (2,808) (2,545) (1,200) (15,357)
Less the elimination of pre-existing
goodwill.............................. (313) -- (25) (106) -- (444)
------- ------- ------- ------- ------- --------
Excess of purchase price over fair
value of tangible net assets
acquired.............................. $ 7,860 $ 8,151 $12,686 $ 5,420 $ 9,587 $ 43,704
======= ======= ======= ======= ======= ========

The difference between the purchase price and the fair market value of the
net assets acquired will be allocated to goodwill and amortized over 40
years. In connection with Wade Ford and the Day's Chevrolet acquisitions,
the Company may be required to issue shares to the former shareholders of
Wade Ford and Day's Chevrolet under price protection provisions, which
compensate for any decrease in the value of shares issued below the issue
price for one year, as set forth in the applicable acquisition agreements.
Any additional shares issued in connection with these price protection
provisions will be accounted for as additional purchase price at the time of
issuance. As required by the purchase agreements, the owners of Grindstaff
and Wade Ford, will repay notes of $754,000 and $515,000, respectively, made
to them by their respective businesses.
(2) Reflects the preliminary allocation of the aggregate purchase price of
$750,000 relating to Holt Ford Mercury based on estimated fair value of the
net assets acquired. Also reflects the elimination of certain cash, used
cars, trade receivables, land, buildings, accounts payable, accrued
expenses, the debt related to land and buildings, and a note payable to the
owner in the Bill Holt Acquisition, because they are not being acquired by
the Company. The purchase price has been allocated to assets acquired and
liabilities assumed at their estimated fair market value at the acquisition
date as follows (in thousands):

Working capital............................................. $200
Property and equipment...................................... 275
Goodwill.................................................... 275
----
Total................................................ $750
====

(3) Reflects the conversion from the LIFO Method of accounting to the FIFO
Method of inventory accounting at acquired entities including: Day's
Chevrolet, Inc., Grindstaff, Inc., the Jay dealerships, the Robertson
dealerships, and the Wade dealerships in the amounts of $1,838,000,
$1,909,000, $438,000, $1,163,000, and $3,602,000, respectively. The Company
intends to convert to the FIFO Method effective July 1, 1998 conditioned and
effective upon the closing of the Offering. See "Management's Discussion and
Analysis of the Financial Condition and Results of Operations -- Overview."

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51

(4) In connection with the Acquisitions and the Offering, the Company will
convert from the LIFO Method of inventory accounting to the FIFO Method of
inventory accounting. The accompanying pro forma combined and condensed
balance sheet includes $2,087,000 representing an additional tax liability
based on an assumed tax rate of 40%, which will result from this conversion.
The tax liability will be paid over a four year period. Pro forma deferred
tax balances approximate the Boomershine Automotive historical balances, as
the book values for assets and liabilities of the Acquisitions approximate
their tax values.
(5) Reflects the net proceeds from the sale of 5,500,000 shares of common stock
offered hereby estimated to be approximately $48.2 million, assuming an
initial public offering price of $10.00 per share and after deducting the
underwriting discount and estimated expenses of the Offering, along with
cash in the businesses to be merged into or acquired by the Company
(amounting to an aggregate of approximately $19.7 million at March 31,
1998), and their application to the cash portion of the purchase price for
the Acquisitions in the aggregate amount of approximately $47 million. The
adjustment reflecting the payment of the cash portion of the purchase price
(i.e., $45,213) is included in footnote (1). See "Use of Proceeds."
(6) Reflects the Collision Centers USA Acquisition on December 18, 1997. The
purchase price for the Collision Centers USA Acquisition was approximately
$1.7 million, one-half of which was paid in cash, and the balance of which
was paid in the form of promissory notes. The Collision Centers have been
consolidated with Boomershine Automotive as of the date of the acquisition.
The excess of purchase price over fair value of tangible net assets acquired
of approximately $1.9 million was allocated to goodwill to be amortized over
40 years.

Also reflects the South Financial Acquisition on January 6, 1998. The
purchase price for South Financial Corporation was approximately $4.65
million, which was paid in cash at the time of closing. To fund the cash
consideration the Company borrowed the sum of $4.5 million from an
affiliated company. See "Certain Transactions -- Certain Business
Relationships." South Financial Corporation has been consolidated with
Boomershine Automotive as of the date of the acquisition. The excess
purchase price over fair value of tangible net assets acquired of
approximately $4.0 million was allocated to goodwill to be amortized over 40
years.

(7) Reflects the Merger of Boomershine Automotive and Sunbelt and the
elimination of intercompany balances. Contemporaneously with the closing
date of the Offering, Boomershine Automotive will merge into the Company in
a transaction to be accounted for as a reverse acquisition/recapitalization.
Upon consummation of the Merger: (i) Boomershine Automotive will be merged
with and into the Company; and (ii) the Boomershine Automotive shareholders
will receive an aggregate of 3,800,160 shares of common stock of the Company
based on a negotiated fixed exchange rate in exchange for the issued and
outstanding capital stock of Boomershine Automotive. As a result of this
stock issuance, the common stock of Boomershine Automotive will be cancelled
and new shares in Sunbelt will be issued. Because Boomershine Automotive had
no par stock and Sunbelt has $0.001 per share par value stock, additional
paid in capital in the amount of $3,970 has been recorded. Boomershine
Automotive has been identified as the accounting acquiror for purposes of
the Acquisitions in accordance with SAB No. 97 as it will hold the largest
voting interest subsequent to the Merger and the Acquisitions.

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52

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion of the results of operations and financial
condition should be read in conjunction with (i) the financial statements of
certain of the entities acquired in the Acquisitions and involved in the Merger,
and the related notes thereto, (ii) the "Pro Forma Combined and Condensed
Financial Data" and the related notes thereto, and (iii) "Selected Financial
Data," all included elsewhere in this Prospectus. Certain statements contained
herein are not based on historical facts, but are forward-looking statements
that are based upon numerous assumptions about future conditions that could
prove not to be accurate. Such forward-looking statements include, without
limitation, the statements regarding the trends in the industry set forth in the
Prospectus Summary and under this caption regarding the Company's anticipated
future financial results and position. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from the
Company's expectations are disclosed in this Prospectus, including but not
limited to the matters described in "Risk Factors."

In addition, Sunbelt has no current operations other than the activities
involved in identifying potential target companies, negotiating the related
acquisition agreements and preparing for the proposed Merger and Acquisitions.
Although certain members of Sunbelt's management have significant automotive
retailing industry experience, Sunbelt has not managed the combined businesses,
and the proposed Merger and certain of the Acquisitions will not occur until the
consummation date of this Offering. Accordingly, any references herein to
"Sunbelt" or the "Company" and the activities and characteristics of the
combined entities should be read as pro forma descriptions of those activities
and characteristics following the consummation of the proposed Merger and all of
the Acquisition transactions.

OVERVIEW

Upon the consummation of the Merger and all of the Acquisitions, Sunbelt
expects to be one of the leading retailers of new and used vehicles in the
southeastern United States. The Company will operate a total of 31 dealership
franchises in Georgia, North Carolina and Tennessee. The Company will also
operate four collision repair centers in metropolitan Atlanta, Georgia, and a
sub-prime automotive finance company with operations in Florida, North Carolina
and Tennessee. Sunbelt will sell 20 domestic and foreign brands of automobiles,
which consist of Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Honda,
Hummer, Isuzu, Jeep, Kia, Mazda, Mercury, Mitsubishi, Nissan, Oldsmobile,
Plymouth, Pontiac and Toyota. The Company intends to further diversify its
product and service offerings by including more brands of vehicles and by
offering related finance and insurance, replacement parts, collision repair, and
other products and services that are complementary to its core automotive
retailing operations. In several of its markets, the Company has significant
market share for the manufacturer type sold. Pro forma for the Merger and the
Acquisitions, the Company had total revenues of $688 million and retail unit
sales of 20,499 new and 9,913 used vehicles for the year ended June 30, 1997,
and revenues of $510 million and retail unit sales of 14,583 new and 7,134 used
vehicles for the nine months ended March 31, 1998. In 1997, based on pro forma
retail new vehicle unit sales, the Company believes it would have ranked 13th on
the Automotive News' listing of the 1997 top 100 dealer groups in the United
States. The Company's strategy is: (i) to become the leading operator of
automotive dealerships in small and medium-sized markets in the southeastern
United States through acquisitions of additional dealerships in these markets;
and (ii) to expand its collision centers and other complementary business
operations.

The Company will have diverse sources of revenues, including: new car
sales, new truck sales, used car sales, used truck sales, manufacturer
remarketed vehicles sales, parts sales, service sales, collision repair
services, finance fees, insurance commissions, extended service contract sales,
and documentary fees. Sales revenues will include sales to retail customers,
other dealers and wholesalers. Other dealership revenue will include revenue
from the sale of financing, insurance and extended service contracts, net of a
provision for anticipated chargebacks and documentary fees charged to customers.

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53

The Company's leasing expenses, salary expense, employee benefits costs and
advertising expenses will comprise the majority of its selling, general and
administrative expenses. The Company's interest expense will primarily result
from the Company's floorplan financing of its new and used vehicle inventory.

The Company has historically accounted for all of its dealership
acquisitions using the purchase method of accounting and, as a result, does not
include in its financial statements the results of operations of these
dealerships prior to the date they were acquired by the Company. The financial
statements of the Company discussed below reflect the combined and consolidated
results of operations, financial position and cash flows of the dealerships that
the Company owns or expects to acquire upon consummation of the Offering. As a
result of the effects of the Merger, the Acquisitions and the Offering, the
historical financial information described herein is not necessarily indicative
of the results of operations, financial position and cash flows of the Company
in the future or the results of operations, financial position and cash flows
which would have resulted had the Merger and the Acquisitions and the Offering
occurred at the beginning of the periods presented in the historical financial
statements.

Contemporaneously with the effective date hereof, the Company will effect
the Merger pursuant to which (i) Boomershine Automotive will be merged with and
into the Company and (ii) the Boomershine Automotive shareholders will receive
unregistered common stock of the Company in exchange for the capital stock in
Boomershine Automotive. From November 1997 through March 1998, the Company
and/or Boomershine Automotive consummated or signed definitive agreements to
purchase six additional dealerships or dealership groups, three collision repair
businesses, and a sub-prime automotive finance company for an aggregate
consideration of approximately $67 million. See "The Acquisitions." In
connection with the Acquisitions, the Company will book approximately $43.5
million of goodwill, consisting of $37.6 million from the six additional
dealerships or dealership groups, $1.9 million from the Collision Centers USA
Acquisition, and $4.0 million from the South Financial Acquisition, each of
which will be amortized over 40 years.

COMPANY'S CREDIT AND FINANCING ARRANGEMENTS

The Company is negotiating floorplan financing lines of credit of up to
$110 million (the "New Floorplan Facility"). As of March 31, 1998, the Company
had approximately $114 million of floorplan debt outstanding. Currently, the
Combined Companies' (as defined below) floorplan financing is provided by six
different sources. The Company anticipates that its floorplan debt will be
restructured to the extent that the terms of the New Floorplan Facility are more
favorable than the terms of the current floorplan financing arrangements of the
Combined Companies, but there can be no assurance that the New Floorplan
Facility will be on terms which are more favorable than those of the existing
financing arrangements. See "Risk Factors -- Floorplan Financing." The Company
estimates that, upon restructuring the floorplan debt, the interest rate on the
New Floorplan Facility will be approximately 50 to 75 basis points below the
Company's current average annual floorplan financing rates, and expects that
this lower rate will result in annual cost savings of $750,000 to $1 million.
South Financial has a revolving credit agreement with General Electric Capital
Corporation with a maximum borrowing capacity of $15 million with advances
permitted under formulas based on percentages of eligible collateral. Management
of the Company does not currently anticipate replacing this facility after this
Offering. The Company is also negotiating a $30 million acquisition, working
capital and general corporate line of credit; however, there can be no assurance
that the Company will be able to obtain this additional line of credit on terms
acceptable to the Company.

The Company believes its cash resources, including the New Floorplan
Facility and the net proceeds of this Offering, will be adequate to fund its
anticipated operations and growth for the foreseeable future.

PRO FORMA COMPANY'S DATA

The unaudited pro forma combined financial data of the Company for 1995,
1996 and 1997 and the nine months ended March 31, 1997 and March 31, 1998, do
not purport to present any or all of the combined companies involved in the
Acquisitions and the Merger (the "Combined Companies") in accordance with
generally accepted accounting principles, but represent a summation of certain
data of the individual Combined Companies on a historical basis. The financial
statements of Hones, Inc. d/b/a Bill Holt Ford-

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54

Mercury and Collision Centers USA have not been separately included within this
Prospectus because said entities do not qualify as significant subsidiaries
under the Commission's Staff Accounting Bulletin (SAB) No. 80 and, accordingly,
are not required to be presented. The data presented in this section may not be
comparable to and may not be indicative of the Company's post-combination
results of operations because (i) the Combined Companies were not under common
control of management and had different tax structures (S-Corporations and
C-Corporations) during the periods presented, and (ii) the Company will use the
purchase method to establish a new basis of accounting to record the
Acquisitions.

The selected historical financial information presented in the tables below
is derived from the respective audited financial statements of the individual
Combined Companies included elsewhere herein. The following discussion should be
read in conjunction with the financial statements of all of the Combined
Companies and the notes thereto appearing elsewhere in the Prospectus.

For financial statement presentation purposes, as required by the rules and
regulations of the Commission, Boomershine Automotive has been identified as the
accounting acquiror.

The following table sets forth unaudited pro forma revenues and cost of
sales for the Combined Companies for the periods indicated. Revenue items are
shown as a percent of total revenues while cost of sales items are shown as a
percent of the corresponding revenue item.

Operations Data

YEAR ENDED JUNE 30, NINE MONTHS ENDED MARCH 31,
------------------------------------------------------ -----------------------------------
1995 1996 1997 1997 1998
---------------- ---------------- ---------------- ---------------- ----------------
AMT. PCT. AMT. PCT. AMT. PCT. AMT. PCT. AMT. PCT.
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
(DOLLARS IN THOUSANDS)

REVENUES:
New vehicle sales........... $357,221 62.9% $403,877 61.8% $420,019 61.0% $306,737 60.5% $315,697 61.9%
Used vehicle sales.......... 142,801 25.1 166,976 25.5 177,925 25.9 132,098 26.1 127,126 24.9
Parts, service and collision
repair.................... 53,625 9.4 61,682 9.4 66,602 9.7 48,884 9.7 50,159 9.8
Finance, commission and
other revenues............ 14,990 2.6 21,564 3.3 23,423 3.4 18,503 3.7 17,308 3.4
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total revenues........ 568,637 100.0% 654,099 100.0% 687,969 100.0% 506,222 100.0% 510,290 100.0%
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
COST OF SALES:
New vehicle sales........... 338,458 94.7% 383,997 95.1% 399,003 95.0% 291,114 94.9% 300,117 95.1%
Used vehicle sales.......... 132,305 92.6 154,638 92.6 164,736 92.6 123,162 93.2 118,396 93.1
Parts, service and collision
repair.................... 32,315 60.3 34,896 56.6 41,305 62.0 29,671 60.7 30,377 60.6
Finance, commission and
other revenues............ 4,347 29.0 7,739 35.9 7,229 30.9 5,329 28.8 4,409 25.5
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total cost of sales... 507,425 89.2% 581,270 88.9% 612,273 89.0% 449,276 88.8% 453,299 88.8%
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
GROSS PROFIT.................. $ 61,212 10.8% $ 72,829 11.1% $ 75,696 11.0% $ 56,946 11.2% $ 56,991 11.2%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====

The following tables set forth certain unaudited pro forma information with
regard to the Combined Companies' vehicle and parts and services sales for the
periods indicated.

New Vehicle Data

PRO FORMA COMBINED COMPANIES NEW VEHICLE DATA
--------------------------------------------------------
NINE MONTHS
YEAR ENDED JUNE 30, ENDED MARCH 31,
-------------------------------- --------------------
1995 1996 1997 1997 1998
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)

Retail unit sales................... 19,493 21,694 20,499 14,851 14,583
Retail sales........................ $357,221 $403,877 $420,019 $306,737 $315,697
Gross profit........................ $ 18,763 $ 19,880 $ 21,017 $ 15,623 $ 15,580
Gross margin........................ 5.3% 4.9% 5.0% 5.1% 5.0%
Average gross profit per retail unit
sold.............................. $ 963 $ 916 $ 1,025 $ 1,052 $ 1,074

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Used Vehicle Data

PRO FORMA COMBINED COMPANIES USED VEHICLE DATA
------------------------------------------------------
NINE MONTHS
YEAR ENDED JUNE 30, ENDED MARCH 31,
-------------------------------- ------------------
1995 1996 1997 1997 1998
-------- -------- -------- ------- -------
(DOLLARS IN THOUSANDS)

Retail unit sales..................... 9,073 10,205 9,913 7,392 7,134
Retail sales.......................... $102,499 $123,338 $121,657 $89,591 $92,856
Gross profit.......................... $ 10,794 $ 12,155 $ 12,758 $ 8,620 $ 8,769
Gross margin.......................... 10.5% 9.9% 10.5% 9.6% 9.4%
Average gross profit per retail unit
sold................................ $ 1,190 $ 1,191 $ 1,287 $ 1,166 $ 1,229
Wholesale unit sales.................. 8,033 8,665 9,442 7,117 5,642
Wholesale sales....................... $ 40,302 $ 43,638 $ 56,268 $42,507 $34,270
Gross profit.......................... $ (298) $ 183 $ 431 $ 316 $ (118)
Gross margin.......................... (0.7)% 0.4% 0.8% 0.7% (0.3)%

Parts and Service Data

PRO FORMA COMBINED COMPANIES PARTS AND SERVICE DATA
---------------------------------------------------
NINE MONTHS
YEAR ENDED JUNE 30, ENDED MARCH 31,
----------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)

Sales.................................... $53,625 $61,682 $66,602 $48,884 $50,159
Gross profit............................. $21,310 $26,786 $25,297 $19,213 $19,781
Gross margin............................. 39.7% 43.4% 38.0% 39.3% 39.4%

Nine Months Ended March 31, 1998 Compared to Nine Months Ended March 31, 1997

Revenues. Total revenues increased by $4.1 million, or 0.8%, from $506.2
million for the nine months ended March 31, 1997 to $510.3 million for the nine
months ended March 31, 1998. New vehicle sales increased $9.0 million, or 2.9%,
from $306.7 million for the nine months ended March 31, 1997 to $315.7 million
for the nine months ended March 31, 1998. This increase was primarily due to
increased sales at Wade Ford, principally at the Buford location, and Day's
Chevrolet. These increases were offset in part by decreased new vehicle sales at
Jay Automotive Group, principally at the Pontiac dealership, and the Bill Holt
Ford-Mercury dealerships. Used vehicle sales decreased $5.0 million, or 3.8%,
from $132.1 million for the nine months ended March 31, 1997 to $127.1 million
for the nine months ended March 31, 1998. This decrease was due primarily to
reduced wholesale used vehicle sales at Boomershine Automotive and at the
Grindstaff dealerships. These decreases were partially offset by increases in
used vehicle sales at the Jay Automotive Group and Bill Holt Ford-Mercury
dealerships. Parts and service sales increased $1.3 million, or 2.6%, from $48.9
million for the nine months ended March 31, 1997 to $50.2 million for the nine
months ended March 31, 1998. This increase was due primarily to increased sales
at Collision Centers USA offset in part by lower parts and service sales at
Day's Chevrolet. Other dealership revenues decreased $1.2 million, or 6.5%, from
$18.5 million for the nine months ended March 31, 1997 to $17.3 million for the
nine months ended March 31, 1998. This decrease was due to lower finance and
commissions income at South Financial offset partially by higher commissions and
documentation fees at Wade Ford.

Gross Profit. Gross profit increased by $100,000, from $56.9 million for
the nine months ended March 31, 1997 to $57.0 million for the nine months ended
March 31, 1998. This slight increase was primarily due to increased finance
margins and higher margins realized at the Grindstaff dealerships due to a
higher proportion of trucks among new vehicle sales, offset by lower gross
margins realized on new vehicle sales, particularly due to increased competition
affecting the Robertson Oldsmobile-Cadillac dealership, and on sales at
Collision Centers USA.

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56

Year Ended June 30, 1997 Compared to Year Ended June 30, 1996

Revenues. Total revenues increased by $33.9 million, or 5.2%, from $654.1
million for the year ended June 30, 1996 to $688.0 million for the year ended
June 30, 1997. New vehicle sales increased $16.1 million, or 4.0%, from $403.9
million for the year ended June 30, 1996 to $420.0 million for the year ended
June 30, 1997. This increase was primarily attributable to higher sales of Ford
products at the Wade Ford and Bill Holt Ford-Mercury dealerships coupled with
the addition of the Buick dealership by the Jay Automotive Group in December
1996. These improvements were partially offset by lower sales at the Boomershine
Nissan and Pontiac locations and the Robertson Oldsmobile-Cadillac dealership.
Used vehicle revenues increased $10.9 million, or 6.6%, from $167.0 million for
the year ended June 30, 1996 to $177.9 million for the year ended June 30, 1997.
This increase resulted from higher wholesale sales at Day's Chevrolet and higher
retail sales at the various Jay Automotive Group locations. These increases were
offset by reductions in retail used vehicle sales at the Boomershine Pontiac and
Nissan dealerships. Parts and service sales increased $4.9 million, or 8.0%,
from $61.7 million for the year ended June 30, 1996 to $66.6 million for the
year ended June 30, 1997. This increase resulted from the growing customer base
at Boomershine Automotive Group and Jay Automotive Group. Other dealership
revenues increased $1.8 million, or 8.6%, from $21.6 million for the year ended
June 30, 1996 to $23.4 million for the year ended June 30, 1997. This increase
was due primarily to higher finance and insurance income at the Boomershine
Automotive dealerships coupled with the higher revenues of South Financial.

Gross Profit. Gross profit increased by $2.9 million, or 4.0%, from $72.8
million for the year ended June 30, 1996 to $75.7 million for the year ended
June 30, 1997. This increase was attributable to higher new and used vehicle
sales levels at the Jay Automotive Group dealerships coupled with higher revenue
from the South Financial business. These factors were offset by lower gross
profit contributions by the Boomershine Automotive dealerships resulting from
lower new vehicle sales and a higher proportion of wholesale units among used
vehicle sales.

Year Ended June 30, 1996 Compared to Year Ended June 30, 1995

Revenues. Total revenues increased by $85.5 million, or 15.0%, from $568.6
million for the year ended June 30, 1995 to $654.1 million for the year ended
June 30, 1996. New vehicle sales increased $46.7 million, or 13.1%, from $357.2
million for the year ended June 30, 1995 to $403.9 million for the year ended
June 30, 1996. This increase was primarily attributable to dealership additions
and higher sales at Bill Holt Ford-Mercury and both Wade Ford locations. The
dealership additions included the Buick, Honda and Mitsubishi dealerships by
Boomershine Automotive and the Mazda dealership by Jay Automotive Group. Used
vehicle revenues increased $24.2 million, or 16.9%, from $142.8 million for the
year ended June 30, 1995 to $167.0 million for the year ended June 30, 1996.
This increase resulted from dealership additions and the expansion of the used
vehicle facility at Robertson Oldsmobile-Cadillac. Parts and service sales
increased $8.1 million, or 15.0%, from $53.6 million for the year ended June 30,
1995 to $61.7 million for the year ended June 30, 1996. This increase resulted
from the dealership additions coupled with expanded customer base and parts
sales at Day's Chevrolet. Other dealership revenues increased $6.6 million, or
44.0%, from $15.0 million for the year ended June 30, 1995 to $21.6 million for
the year ended June 30, 1996. This increase was due primarily to the dealership
additions at Boomershine Automotive coupled with higher finance revenue from
South Financial.

Gross Profit. Gross profit increased by $11.0 million, or 18.0%, from
$61.2 million for the year ended June 30, 1995 to $72.8 million for the year
ended June 30, 1996. This increase was attributable to dealership additions at
the Boomershine Automotive and Jay Automotive along with higher revenue from
South Financial.

INDIVIDUAL MERGER AND ACQUISITION COMPANIES

BOOMERSHINE AUTOMOTIVE GROUP, INC.

Results of Operations

Prior to the Offering, Boomershine Automotive Group, Inc. was one of the
largest automotive dealership groups in Georgia and consisted of nine automotive
dealerships serving the greater Atlanta metropolitan

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market. The dealerships included Pontiac, Buick, GMC, Hummer, Nissan, Ford,
Isuzu, Honda and Mitsubishi. Executive management of this group includes Mr.
Walter M. Boomershine, Jr., who has over 40 years of experience in the
automotive retailing industry, and Mr. Charles K. Yancey who joined the company
in 1974. Six of the group's nine dealerships have been added under this
executive leadership since 1992.

The following table sets forth selected financial data and such data as a
percentage of total revenues for the Boomershine Automotive dealerships for the
periods indicated on a consolidated basis:

YEAR ENDED JUNE 30, NINE MONTHS ENDED MARCH 31,
-------------------------------------------------------- ------------------------------------
1995 1996 1997 1997 1998
---------------- ---------------- ---------------- ---------------- ----------------
AMOUNT PCT. AMOUNT PCT. AMOUNT PCT. AMOUNT PCT. AMOUNT PCT.
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
(DOLLARS IN THOUSANDS) (UNAUDITED)

Revenues:
New vehicle sales..... $156,955 65.9% $166,199 63.2% $152,625 61.7% $113,239 61.3% $113,340 63.4%
Used vehicle sales.... 57,047 23.9 64,652 24.6 61,811 25.0 47,318 25.6 39,517 22.1
Parts and service
sales............... 19,223 8.1 23,764 9.0 24,637 10.0 17,689 9.6 19,108 10.7
Other revenues, net... 5,095 2.1 8,279 3.1 8,372 3.3 6,514 3.5 6,701 3.8
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total
revenues...... 238,320 100.0 262,894 100.0 247,445 100.0 184,760 100.0 178,666 100.0
Cost of sales........... 215,646 90.5 235,829 89.7 222,352 89.9 165,705 89.7 158,328 88.6
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Gross profit............ 22,674 9.5 27,065 10.3 25,093 10.1 19,055 10.3 20,338 11.4
Selling, general and
administrative
expenses.............. 20,333 8.5 24,770 9.4 23,152 9.3 17,357 9.4 17,308 9.7
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income from
operations............ 2,341 1.0 2,295 0.9 1,941 0.8 1,698 0.9 3,030 1.7
Other income and
expense:
Interest expense,
net................. 1,218 0.5 1,593 0.6 2,110 0.9 1,224 0.7 1,297 0.8
Other income
(expense)........... 60 0.0 13 0.0 44 0.0 (80) (0.0) (68) (0.0)
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income (loss) before in-
come taxes............ 1,183 0.5 715 0.3 (125) (0.1) 394 0.2 1,665 0.9
Income tax (expense)
benefit............... (448) (0.2) (213) (0.1) 40 0.1 (119) (0.0) (398) (0.2)
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Net income (loss)....... $ 735 0.3% $ 502 0.2% $ (85) (0.0)% $ 275 0.2% $ 1,267 0.7%
======== ======== ======== ======== ========

Nine Months Ended March 31, 1998 Compared to Nine Months Ended March 31, 1997

Revenues. Total revenues decreased $6.1 million, or 3.3%, from $184.8
million for the nine months ended March 31, 1997 to $178.7 million for the nine
months ended March 31, 1998. New vehicle sales increased $101,000, or 0.1%, from
$113.2 million for the nine months ended March 31, 1997 to $113.3 million for
the nine months ended March 31, 1998. This increase was primarily due to higher
sales of trucks and fleet units at Boomershine Ford, resulting in a 30.1%
increase in sales volume, and increased sales of utility vehicles at Boomershine
Mitsubishi. These increases were partially offset by a 31.9% decrease in the
sales of new vehicles at Boomershine Nissan. Used vehicle sales decreased $7.8
million, or 16.5%, from $47.3 million for the nine months ended March 31, 1997
to $39.5 million for the nine months ended March 31, 1998. This decrease was due
primarily to reduced wholesale activity at Boomershine Ford and Boomershine
Nissan, due to fewer trade-ins available for sale. These decreases were offset
in part by a sales increase at Boomershine Mitsubishi due to additional
investments in space and personnel. Parts and service sales increased $1.4
million, or 8.0%, from $17.7 million for the nine months ended March 31, 1997 to
$19.1 million for the nine months ended March 31, 1998. This increase was due
primarily to the acquisition of Collision Centers USA in December 1997 offset
partially by reduced sales of parts and service at Boomershine Nissan. The sales
of parts and service at Collision Centers USA for the three months ended March
31, 1998 amounted to $1.7 million. Other dealership revenues increased $187,000,
or 2.9%, from $6.5 million for the nine months ended March 31, 1997 to $6.7
million for the nine months ended March 31, 1998. This increase was due to the
South Financial Acquisition in January 1998 offset by lower finance and
insurance commissions at Boomershine Nissan.

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Gross Profit. Gross profit increased $1.3 million, or 6.7%, from $19.1
million for the nine months ended March 31, 1997 to $20.3 million for the nine
months ended March 31, 1998. Of this amount, $1.8 million was attributable to
the Collision Centers USA and South Financial acquisitions. Increased new
vehicle sales at Boomershine Ford and Mitsubishi also attributed to the
increased gross profits. These increases were partially offset by the effects of
lower new and used vehicle sales at Boomershine Nissan.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $49,000, or 0.3%, from $17.4 million for the
nine months ended March 31, 1997 to $17.3 million for the nine months ended
March 31, 1998. This decrease was primarily due to reductions at Boomershine
Pontiac and Boomershine Nissan for personnel realignments and lower marketing
expense and sales commissions. These decreases were partially offset by the
Collision Centers USA and South Financial acquisitions, together amounting to
$1.4 million in the three months ended March 31, 1998, and higher sales
commissions at Boomershine Ford.

Interest Expense, net. Interest expense, net increased $73,000 or 6.0%,
from $1.2 million for the nine months ended March 31, 1997 to $1.3 million for
the nine months ended March 31, 1998. This increase was attributable to the
Collision Centers USA and South Financial acquisitions, together amounting to
$364,000 in the three months ended March 31, 1998, offset in part by lower
interest charges at Boomershine Pontiac and greater manufacturer support at
Boomershine Ford.

Year Ended June 30, 1997 Compared to Year Ended June 30, 1996

Revenues. Total revenues decreased by $15.4 million, or 5.9%, from $262.9
million for the year ended June 30, 1996 to $247.4 million for the year ended
June 30, 1997. New vehicle sales revenues decreased $13.6 million, or 8.2% from
$166.2 million for the year ended June 30, 1996 to $152.6 million for the year
ended June 30, 1997. This decrease was primarily attributable to reduced unit
sales of fleet vehicles at both the Boomershine Pontiac and Ford dealerships and
a 14% reduction in retail unit sales at the Boomershine Nissan dealership. Used
vehicle revenues decreased $2.8 million, or 4.4%, from $64.7 million for the
year ended June 30, 1996 to $61.8 million for the year ended June 30, 1997. This
decrease resulted from reduced used vehicle trade-in availability at the
Boomershine Nissan and Pontiac dealerships and reduced wholesale activity at the
Boomershine Ford dealership. These were partially offset by the increase in used
vehicle sales at the Boomershine Mitsubishi dealership that was owned for a
partial year in the year ended June 30, 1996. Parts and service sales increased
$873,000, or 3.7%, from $23.8 million for the year ended June 30, 1996 to $24.6
million for the year ended June 30, 1997. This increase resulted from higher
revenues from service and bodywork at the Boomershine Pontiac, Mitsubishi and
Ford locations and the overall economic strength of the markets served. Other
Boomershine Automotive dealership revenues increased $93,000, or 1.1%, from $8.3
million for the year ended June 30, 1996 to $8.4 million for the year ended June
30, 1997. This increase was due primarily to increased finance and insurance
income and a generally competitive lending environment.

Gross Profit. Gross profit decreased by $2.0 million, or 7.3%, from $27.1
million for the year ended June 30, 1996 to $25.1 million for the year ended
June 30, 1997. This decrease was attributable to lower overall revenue levels
and profit contribution at the Boomershine Nissan location and was offset in
part by higher average new and used margins at the Boomershine Ford dealership.
The margins were also impacted by the effect of having the Boomershine
Mitsubishi dealership for an entire year in the year ended June 30, 1997.
Overall, the percentage gross margin decreased from 10.3% for the year ended
June 30, 1996 to 10.1% for the year ended June 30, 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $1.6 million, or 6.5%, from $24.8 for the year
ended June 30, 1996 to $23.2 million for the year ended June 30, 1997. This
decrease was primarily due to expense rationalization and lower incentive
compensation charges at the Boomershine Nissan dealership. These were partially
offset by increases in personnel costs at the Boomershine Pontiac, Ford and
Mitsubishi dealerships.

Interest Expense, net. Interest expense, net increased $517,000, or 32.5%,
from $1.6 million for the year ended June 30, 1996 to $2.1 million for the year
ended June 30, 1997. This increase was attributable primarily to slower
inventory turns at Boomershine Pontiac and Nissan locations.

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Year Ended June 30, 1996 Compared to Year Ended June 30, 1995

Revenues. Total revenues increased by $24.6 million, or 10.3%, from $238.3
million for the year ended June 30, 1995 to $262.9 million for the year ended
June 30, 1996. New vehicle sales revenues increased $9.2 million, or 5.9% from
$157.0 million for the year ended June 30, 1995 to $166.2 million for the year
ended June 30, 1996. This increase was primarily attributable to Boomershine
Automotive's addition of the Honda and Mitsubishi dealerships in the Cobb
County, Georgia market area and higher average per unit sales at the Boomershine
Ford and Nissan dealerships. Used vehicle revenues increased $7.6 million, or
13.3%, from $57.0 million for the year ended June 30, 1995 to $64.6 million for
the year ended June 30, 1996. This increase resulted from the addition of the
Boomershine Honda and Mitsubishi dealerships and higher wholesale revenues at
the Boomershine Ford dealership. These factors were partially offset by lower
used vehicle sales at the Boomershine Pontiac/GMC location. Parts and service
sales increased $4.5 million, or 23.6%, from $19.2 million for the year ended
June 30, 1995 to $23.7 million for the year ended June 30, 1996. This increase
resulted from the Boomershine Honda and Mitsubishi dealership additions and
higher service revenues at the Boomershine Pontiac dealership. Other Boomershine
Automotive dealership revenues increased $3.2 million, or 62.5%, from $5.1
million for the year ended June 30, 1995 to $8.3 million for the year ended June
30, 1996. This increase was due primarily to the Boomershine Buick and
Mitsubishi dealership additions and increased unit sales.

Gross Profit. Gross profit increased by $4.4 million, or 19.4%, from $22.7
million for the year ended June 30, 1995 to $27.1 million for the year ended
June 30, 1996. This increase was attributable to the addition of the Boomershine
Buick and Mitsubishi dealerships and the impact of higher revenues and average
sales per unit, particularly at the Boomershine Ford dealership.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $4.4 million, or 21.8%, from $20.3 million for
the year ended June 30, 1995 to $24.7 million for the year ended June 30, 1996.
This increase was primarily due to the addition of the Boomershine Honda and
Mitsubishi dealerships as well as added personnel charges for the Boomershine
Ford and Pontiac locations.

Interest Expense, net. Interest expense, net increased $375,000, or 30.8%,
from $1.2 million for the year ended June 30, 1995 to $1.6 million for the year
ended June 30, 1996. This increase was attributable to increased inventory
levels at the Boomershine Ford location and slow-moving conversion van inventory
at the Boomershine Pontiac dealership.

Liquidity and Capital Resources

The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. Boomershine Automotive's principal sources of
liquidity are cash on hand, cash from operations and floorplan financing.

The following table sets forth historical selected information from
Boomershine Automotive's statements of cash flows for the periods indicated:

NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ----- ------- --------
(IN THOUSANDS) (UNAUDITED)

Net cash provided by (used in) operating
activities.................................... $ 4,197 $ 3,513 $ 429 $1,085 $ 2,061
Net cash provided by (used in) investing
activities.................................... (2,740) (4,238) (612) (828) (6,058)
Net cash provided by (used in) financing
activities.................................... 799 9 (259) (168) 4,158
------- ------- ----- ------ -------
Net increase (decrease) in cash and cash
equivalents................................... $ 2,256 $ (716) $(442) $ 89 $ 161
======= ======= ===== ====== =======

As of March 31, 1998 a subsidiary of Boomershine Automotive was not in
compliance with certain terms of a credit agreement; however, the subsidiary
received a waiver of this violation through September 30, 1998. As of the date
of this Prospectus, the subsidiary has cured this violation and now is in
compliance with that credit agreement.

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Cash Flows

Total cash and cash equivalents at March 31, 1998 were $4.7 million.

For the three years ended June 30, 1997, Boomershine Automotive generated
$3.0 million in cash flow from net income (loss) plus depreciation and
amortization. Net cash flow from operating activities is significantly impacted
by changes in inventory levels reflecting strategic and marketing decisions.
Inventory levels increased by $19.9 million and $1.7 million for the fiscal
years ended June 30, 1995 and 1996, respectively. During the year ended June 30,
1997, the aggregate inventory level decreased by $10.7 million.

Changes in the outstanding balance under the floorplan arrangements also
serve to influence the net cash flow from operations. During the years ended
June 30, 1995 and 1996 the notes payable balance owed to floorplan lenders
increased $25.2 million and $2.8 million, respectively. For the year ended June
30, 1997, such notes payable balances decreased as a result of a repayment of
$12.6 million.

For the nine months ended March 31, 1998, the Boomershine Automotive
dealerships generated net cash flow of $2.0 million from net income plus
depreciation and amortization compared to $935,000 in the nine months ended
March 31, 1997. This resulted from the improvement in net earnings.

The change in net cash used in investing activities for the three years
ended June 30, 1997 amounted to $7.6 million. This was primarily attributable to
capital expenditures for the acquisition of the Boomershine Honda, Mitsubishi
and Buick dealerships, expansion of the rental car program, renovation of
showroom facilities and construction of a collision repair center.

The change in net cash used in investing activities for the nine months
ended March 31, 1998 resulted from the payment of the cash component of the
Collision Centers USA Acquisition and routine capital expenditures.

The change in net cash related to financing activities was primarily
attributable to borrowings and repayments under long-term debt. For the years
ended June 30, 1995 and 1996, the increase in these notes payable amounted to
$799,000 and $9,000, respectively. For the year ended June 30, 1997, the amount
owed under these notes decreased by $259,000.

The change in net cash related to financing activities for the nine months
ended March 31, 1998 resulted from a loan from a related party amounting to $4.5
million to facilitate the South Financial Acquisition in January 1998.

Floorplan Financing

Boomershine Automotive currently obtains floorplan financing for its
dealerships' vehicle inventories primarily through Ford Motor Credit and
NationsBank Credit. As of March 31, 1998, the Boomershine Automotive dealerships
had approximately $49.9 million of outstanding floorplan financing. The debt
bears interest at LIBOR plus 200 to 225 basis points. Interest expense on
floorplan notes payable, before manufacturers' interest assistance, totaled
approximately $3.6 million, $4.5 million and $3.8 million for the years ended
June 30, 1995, 1996 and 1997, respectively. Manufacturers' interest assistance,
which is recorded as a reduction to interest expense, amounted to $2.7 million,
$2.9 million and $2.0 million for the years ended June 30, 1995, 1996 and 1997,
respectively.

Leases

The Boomershine Automotive dealerships lease their primary operating
facilities under operating leases, including leases with related parties, which
expire at various dates through 2017. Certain of the leases contain automatic
renewal provisions that require the lessee to affirmatively state its intention
to vacate. Management believes that the terms and provisions of the related
party leases approximate those available from third parties.

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JAY AUTOMOTIVE GROUP

Results of Operations

Prior to the Offering, Jay Automotive Group, Inc. consisted of six retail
automotive dealerships and four used car facilities serving the Columbus,
Georgia market. The dealerships included Toyota, Mazda, Pontiac, Buick, GMC and
Mitsubishi. Mr. James G. Stelzenmuller, III, who has over 15 years of experience
in the automotive retailing industry and has managed this business since 1983,
owned Jay Automotive immediately prior to the Offering.

Certain related businesses (e.g. leasing and insurance subsidiaries) that
were subsidiaries of Jay Automotive were divested prior to the Offering.
Accordingly, the financial results of those related businesses are not included
in the accompanying financial statements and are excluded from the discussion
below.

The following table sets forth selected financial data and such data as a
percentage of total revenues for the combined Jay Automotive Group dealerships
for the periods indicated:

YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
---------------------------------------------------------- -------------------------------------
1995 1996 1997 1997 1998
----------------- ----------------- ------------------ ----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)

Revenues:
New vehicle sales........ $46,763 58.5% $56,329 58.6% $ 54,899 54.2% $13,748 54.2% $12,756 51.5%
Used vehicle sales....... 21,990 27.5 26,358 27.4 31,562 31.2 7,462 29.4 7,899 31.9
Parts and service
sales.................. 9,009 11.3 10,636 11.2 11,869 11.7 3,218 12.7 3,207 13.0
Other revenues, net...... 2,190 2.7 2,723 2.8 2,913 2.9 948 3.7 902 3.6
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
Total revenues..... 79,952 100.0 96,046 100.0 101,243 100.0 25,376 100.0 24,764 100.0
Cost of sales.............. 70,604 88.3 84,763 88.3 89,272 88.2 22,087 87.0 21,669 87.5
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
Gross profit............... 9,348 11.7 11,283 11.7 11,971 11.8 3,289 13.0 3,095 12.5
Selling, general and
administrative
expenses................. 7,134 8.9 8,952 9.3 9,588 9.4 2,411 9.5 2,537 10.3
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
Income from operations..... 2,214 2.8 2,331 2.4 2,383 2.4 878 3.5 558 2.2
Other income and expense:
Interest expense, net.... 360 0.5 301 0.3 261 0.3 79 0.3 8 0.0
Other income (expense)... -- -- -- -- -- -- -- -- -- --
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
Income before income
taxes.................... 1,854 2.3 2,030 2.1 2,122 2.1 799 3.2 550 2.2
Income tax expense......... (703) (0.9) (775) (0.8) (806) (0.8) (304) (1.2) (209) (0.8)
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
Net income................. $ 1,151 1.4% $ 1,255 1.3% $ 1,316 1.3% $ 495 2.0% $ 341 1.4%
======= ======= ======== ======= =======

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997

Revenues. Total revenues decreased $612,000, or 2.4%, from $25.4 million
for the three months ended March 31, 1997 to $24.8 million for the three months
ended March 31, 1998. New vehicle sales decreased $1.0 million, or 7.2%, from
$13.7 million for the three months ended March 31, 1997 to $12.7 million for the
three months ended March 31, 1998. This decrease was primarily due to lower
Mitsubishi and Pontiac sales, which was offset partially by higher GMC truck
sales. Used vehicle sales increased $437,000, or 5.9%, from $7.5 million for the
three months ended March 31, 1997 to $7.9 million for the three months ended
March 31, 1998. This increase was due primarily to higher retail used vehicle
sales at the newly opened used vehicle facility offset in part by reduced
wholesale activity. Parts and service sales decreased $11,000, or 0.3%, from
$3.2 million for the three months ended March 31, 1997 to $3.2 million for the
three months ended March 31, 1998. This decrease was due primarily to reduced
selling days available at the Pontiac and Buick dealerships. Other dealership
revenues decreased $46,000, or 4.9%, from $948,000 for the three months ended
March 31, 1997 to $902,000 for the three months ended March 31, 1998. This
decrease was due to lower finance and insurance commissions. Decrease of
revenues was partially attributable to the disruption of the business caused by
the relocation of certain dealerships to a newly-opened auto mall location.

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Gross Profit. Gross profit decreased $194,000, or 5.9%, from $3.3 million
for the three months ended March 31, 1997 to $3.1 million for the three months
ended March 31, 1998. This decrease was primarily due to reduced operating days
resulting from the relocation described above and reductions in the gross margin
percentage achieved at the Toyota and Pontiac locations.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $126,000, or 5.2%, from $2.4 million for the
three months ended March 31, 1997 to $2.5 million for the three months ended
March 31, 1998. This increase was primarily due to higher compensation charges
and expenses associated with opening the new sales location offset in part by
higher marketing co-op reimbursements.

Interest Expense, net. Interest expense, net decreased $71,000, or 89.9%,
from $79,000 for the three months ended March 31, 1997 to $8,000 for the three
months ended March 31, 1998. This decrease was primarily attributable to
increased manufacturer support.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total revenues increased by $5.2 million, or 5.4%, from $96.0
million for the year ended December 31, 1996 to $101.2 million for the year
ended December 31, 1997. New vehicle sales decreased $1.4 million, or 2.5% from
$56.3 million for the year ended December 31, 1996 to $54.9 million for the year
ended December 31, 1997. This decrease was primarily attributable to reductions
in the availability of Toyota vehicles from the distributor and a decline in
demand for Pontiac vehicles. These factors were partially offset by the impact
of the addition of the Buick dealership to Jay Automotive in December 1996. Used
vehicle sales increased $5.2 million, or 19.7%, from $26.4 million for the year
ended December 31, 1996 to $31.6 million for the year ended December 31, 1997.
This increase resulted from the implementation of a market segmentation strategy
and more management focus in this area. Parts and service sales increased $1.2
million, or 11.6%, from $10.6 million for the year ended December 31, 1996 to
$11.9 million for the year ended December 31, 1997. This increase resulted from
the addition of the Buick dealership. Other dealership revenues increased
$190,000, or 7.0%, from $2.7 million for the year ended December 31, 1996 to
$2.9 million for the year ended December 31, 1997. This minor increase was due
primarily to higher finance and documentation income.

Gross Profit. Gross profit increased by $688,000, or 6.1%, from $11.3
million for the year ended December 31, 1996 to $12.0 million for the year ended
December 31, 1997. This increase was attributable to higher overall unit sales
and the addition of the Buick dealership to Jay Automotive in December 1996 and
its related service and parts income.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $636,000, or 7.1%, from $8.9 million for the
year ended December 31, 1996 to $9.6 million for the year ended December 31,
1997. This increase was primarily due to the addition of personnel to the Jay
Automotive Toyota body shop operations and the Jay Automotive Buick dealership.
These additions were partially offset by a reduction in sales incentive
compensation related to the reduction in new unit sales.

Interest Expense, net. Interest expense, net decreased $40,000, or 13.3%,
from $301,000 for the year ended December 31, 1996 to $261,000 for the year
ended December 31, 1997.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenues. Total revenues increased by $16.1 million, or 20.1%, from $79.9
million for the year ended December 31, 1995 to $96.0 million for the year ended
December 31, 1996. New vehicle sales increased $9.6 million, or 20.5% from $46.7
million for the year ended December 31, 1995 to $56.3 million for the year ended
December 31, 1996. This increase was primarily attributable to the addition of
the Mazda dealership to Jay Automotive in November 1995. Used vehicle sales
increased $4.4 million, or 19.9%, from $22.0 million for the year ended December
31, 1995 to $26.4 million for the year ended December 31, 1996. This increase
resulted from the addition of the Mazda dealership to Jay Automotive and the
dealership's favorable location for used car sales. This increase was partially
offset by reductions in used vehicle sales from the Jay Automotive Toyota and
Pontiac dealership locations. Parts and service sales increased $1.6 million, or
18.1%, from $9.0 million for the year ended December 31, 1995 to $10.6 million
for the year ended December 31, 1996. This increase

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63

resulted from the Mazda dealership addition. Other dealership revenues increased
$533,000, or 24.3%, from $2.2 million for the year ended December 31, 1995 to
$2.7 million for the year ended December 31, 1996. This minor increase was due
primarily to documentation and insurance commission income.

Gross Profit. Gross profit increased by $1.9 million, or 20.7%, from $9.3
million for the year ended December 31, 1995 to $11.3 million for the year ended
December 31, 1996. This increase was attributable to overall increased unit
sales led by the addition of the Mazda dealership to Jay Automotive in November
1995.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.8 million, or 25.5%, from $7.1 million for
the year ended December 31, 1995 to $8.9 million for the year ended December 31,
1996. This increase was primarily due to the increase in personnel that resulted
from the addition of the Mazda dealership and increased employee benefit costs
and increased support staff compensation at the Toyota dealership.

Interest Expense, net. Interest expense, net decreased $59,000, or 16.4%,
from $360,000 for the year ended December 31, 1995 to $301,000 for the year
ended December 31, 1996. This decrease was attributable to additional
manufacturer support under floorplan financing arrangements.

Liquidity and Capital Resources

The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. Jay Automotive Group's principal sources of
liquidity are cash on hand, cash from operations and floorplan financing.

The following table sets forth historical selected information from the
combined Jay Automotive Group dealership's statements of cash flows for the
periods indicated:

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------- ---------------
1995 1996 1997 1997 1998
------- ---- ------ ------ -----
(IN THOUSANDS) (UNAUDITED)

Net cash provided by (used in) operating
activities.............................. $ 1,895 $669 $1,424 $1,124 $ 443
Net cash provided by (used in) investing
activities.............................. (1,819) (90) (74) (214) 21
Net cash provided by (used in) financing
activities.............................. 73 37 2 (123) (150)
------- ---- ------ ------ -----
Net increase (decrease) in cash and cash
equivalents............................. $ 149 $616 $1,352 $ 787 $ 314
======= ==== ====== ====== =====

Cash Flows

Total cash and cash equivalents at March 31, 1998 were $4.1 million.

For the three years ended December 31, 1997, the Jay Automotive Group
dealerships generated $4.4 million in cash flow from net income plus
depreciation and amortization. Net cash flow from operating activities ranged
during this period from a high of $1.9 million in 1995 to a low of $669,000 in
1996. The primary factors influencing these results are net income, change in
investment in inventories and the net borrowing or net repayment on the
floorplan arrangements.

The change in net cash provided by operations for the three months ended
March 31, 1998 compared to the quarter ended March 31, 1997 resulted from
increases in inventories and accounts receivable offset partially by an increase
in floorplan borrowings.

The change in net cash used in investing activities for the three years
ended December 31, 1997 was primarily attributable to capital expenditures, the
purchase of the Mazda dealership in 1995 and the purchase of the Buick franchise
in 1996.

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The change in net cash related to financing activities was primarily
attributable to reductions in amounts owed to unconsolidated subsidiaries which
were partially offset by repayments on long-term debt.

Floorplan Financing

Jay Automotive Group currently obtains floorplan financing for its vehicle
inventory primarily through General Motors Acceptance Corporation ("GMAC"),
World Omni Finance and a commercial bank. As of March 31, 1998, Jay Automotive
Group had approximately $13.7 million of outstanding floorplan financing. The
debt bears interest at various rates which generally fluctuate with the prime
rate or LIBOR and which ranged from 7.2% to 10.25% at December 31, 1997. The
floorplan lenders generally provide for rebate reductions in interest expense
based on volume and other factors as well as manufacturers' assistance based on
an agreed-upon amounts which vary by model. Interest expense on floorplan notes
payable, before manufacturers' interest assistance, totaled approximately $1.0
million, $1.4 million and $864,000 for the years ended December 31, 1995, 1996
and 1997, respectively. Manufacturers' interest assistance, which is recorded as
a reduction to interest expense, amounted to approximately $608,000, $1.1
million and $530,000 for the years ended December 31, 1995, 1996 and 1997,
respectively.

Leases

The real estate and buildings housing the Jay Automotive Pontiac, GMC,
Buick, Mitsubishi and Mazda dealerships and a major used car facility are leased
from a company owned and controlled by James G. Stelzenmuller, the former sole
shareholder of Jay Automotive Group, Inc. This facility is pledged as collateral
to an Industrial Revenue Bond used to finance its construction. Certain other
facilities used in the business operations of Jay Automotive are leased on a
month to month basis and the lease understandings are not in writing. Management
believes these leases and informal arrangements contain terms and rates that are
comparable to those which are available on the open market.

WADE FORD, INC. AND WADE FORD BUFORD, INC. -- COMBINED

Results of Operations

Wade Ford, Inc. and Wade Ford Buford, Inc. operate Ford dealerships located
in Smyrna and Buford, Georgia, respectively both suburban locations which are
part of the greater metropolitan Atlanta market. Prior to the Offering, both
dealerships were owned by Mr. Alan K. Arnold and several other minority
shareholders. Mr. Arnold has over 20 years of automotive retailing experience in
the greater Atlanta area. The Smyrna-based dealership was originally founded in
the early 1950's and the Buford-based dealership was added in 1990.

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The following table sets forth selected financial data and such data as a
percentage of total revenues for the combined Wade Ford Dealerships for the
periods indicated:

YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------------------------ ---------------------------------------
1995 1996 1997 1997 1998
------------------ ------------------ ------------------ ------------------ ------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- ------- -------- ------- -------- ------- -------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)

Revenues:
New vehicle sales...... $ 83,486 71.3% $105,696 73.3% $129,942 78.2% $ 33,048 78.9% $ 30,607 76.2%
Used vehicle sales..... 22,905 19.6 27,633 19.2 24,430 14.7 6,006 14.4 6,562 16.4
Parts and service
sales................ 9,118 7.8 8,810 6.1 9,244 5.6 2,326 5.6 2,481 6.2
Other revenues, net.... 1,471 1.3 1,975 1.4 2,424 1.5 480 1.1 501 1.2
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total revenues... 116,980 100.0 144,114 100.0 166,040 100.0 41,860 100.0 40,151 100.0
Cost of sales............ 107,027 91.5 131,982 91.6 153,378 92.4 38,676 92.4 37,231 92.7
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Gross profit............. 9,953 8.5 12,132 8.4 12,662 7.6 3,184 7.6 2,920 7.3
Selling, general and
administrative
expenses............... 9,504 8.1 11,261 7.8 10,467 6.3 2,637 6.3 2,581 6.5
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income from operations... 449 0.4 871 0.6 2,195 1.3 547 1.3 339 0.8
Other income and expense:
Interest expense,
(income) net........... 120 0.1 209 0.2 (5) (0.0) 22 0.1 (34) (0.1)
Other income (expense),
net.................. 230 0.2 252 0.2 95 0.1 12 0.0 7 0.0
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income before income
taxes.................. 559 0.5 914 0.6 2,295 1.4 537 1.2 380 0.9
Income tax expense....... -- -- -- -- -- -- -- -- -- --
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Net income............... $ 559 0.5% $ 914 0.6% $ 2,295 1.4% $ 537 1.2% $ 380 0.9%
======== ======== ======== ======== ========

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997

Revenues. Total revenues decreased $1.7 million, or 4.1%, from $41.9
million for the three months ended March 31, 1997 to $40.2 million for the three
months ended March 31, 1998. New vehicle sales decreased $2.4 million, or 7.4%,
from $33.0 million for the three months ended March 31, 1997 to $30.6 million
for the three months ended March 31, 1998. This decrease was primarily due to
lower sales of fleet units at the Smyrna location offset in part by increased
truck sales at the Buford location. Used vehicle sales increased $556,000, or
9.3%, from $6.0 million for the three months ended March 31, 1997 to $6.6
million for the three months ended March 31, 1998. This increase was due
primarily to higher sales of remarketed Ford vehicles at the Buford location and
a strategy of dealing in later models. Parts and service sales increased
$155,000, or 6.7%, from $2.3 million for the three months ended March 31, 1997
to $2.5 million for the three months ended March 31, 1998. This increase was due
primarily to population growth and a larger customer base in the Buford
dealership area. Other dealership revenues increased $21,000, or 4.4%, from
$480,000 for the three months ended March 31, 1997 to $501,000 for the three
months ended March 31, 1998. This increase was due to higher warranty sales
offset in part by lower finance and insurance commissions.

Gross Profit. Gross profit decreased $264,000, or 8.3%, from $3.2 million
for the three months ended March 31, 1997 to $2.9 million for the three months
ended March 31, 1998. This decrease was primarily due to lower fleet sales
activity and lower margins on used vehicle sales offset in part by higher sales
of parts and services.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $56,000, or 2.1%, from $2.6 million for the
three months ended March 31, 1997 to $2.6 million for the three months ended
March 31, 1998. This decrease was primarily due to reduced sales commissions and
lower workers compensation insurance premiums offset in part by higher
compensation for support personnel at the Buford location.

Interest Expense, net. Interest expense, net decreased $56,000 or 254.5%,
from $22,000 for the three months ended March 31, 1997 to $(34,000) for the
three months ended March 31, 1998. This decrease was attributable to lower
inventory levels.

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Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total revenues increased by $21.9 million, or 15.2%, from $144.1
million for the year ended December 31, 1996 to $166.0 million for the year
ended December 31, 1997. New vehicle sales increased $24.2 million, or 22.9%
from $105.7 million for the year ended December 31, 1996 to $129.9 million for
the year ended December 31, 1997. This increase was primarily attributable to
strong regional growth near the Wade Ford Buford location and increased emphasis
on fleet sales at the Wade Ford Smyrna location. Used vehicle sales decreased
$3.2 million, or 11.6%, from $27.6 million for the year ended December 31, 1996
to $24.4 million for the year ended December 31, 1997. This decrease resulted
from increased competition near the Wade Ford Smyrna location. Parts and service
sales increased $434,000, or 4.9%, from $8.8 million for the year ended December
31, 1996 to $9.2 million for the year ended December 31, 1997. This increase
resulted from the higher retail demand at the Wade Ford Buford location
resulting in higher new vehicle unit sales. Other dealership revenues increased
$449,000, or 22.7%, from $2.0 million for the year ended December 31, 1996 to
$2.4 million for the year ended December 31, 1997. This increase was due
primarily to higher documentation fee income.

Gross Profit. Gross profit increased by $530,000, or 4.4%, from $12.1
million for the year ended December 31, 1996 to $12.6 million for the year ended
December 31, 1997. This increase was attributable to higher overall revenues at
both Wade Ford Dealerships. The gross profit as a percent of sales decreased
from 8.4% in 1996 compared to 7.7% in 1997 due to the generally lower returns on
fleet sales.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $794,000, or 7.1%, from $11.3 million for the
year ended December 31, 1996 to $10.5 million for the year ended December 31,
1997. This decrease was primarily due to lower charges for advertising, rents,
bad debts and professional fees.

Interest Expense, net. Interest expense, net decreased $214,000, or
102.4%, from $209,000 (expense) for the year ended December 31, 1996 to $5,000
(income) for the year ended December 31, 1997. This decrease was attributable
primarily to greater manufacturer credits which were partially offset by higher
charges incurred for larger average inventory levels.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenues. Total revenues increased by $27.1 million, or 23.2%, from $117.0
million for the year ended December 31, 1995 to $144.1 million for the year
ended December 31, 1996. New vehicle sales increased $22.2 million, or 26.6%
from $83.5 million for the year ended December 31, 1995 to $105.7 million for
the year ended December 31, 1996. This increase was primarily attributable to
expanded fleet sales and overall economic growth in the Buford area. Used
vehicle sales increased $4.7 million, or 20.6%, from $22.9 million for the year
ended December 31, 1995 to $27.6 million for the year ended December 31, 1996.
This increase resulted from the strategic decision by the Wade Ford Buford
management team to carry larger used car inventories. Parts and service sales
decreased $308,000, or 3.4%, from $9.1 million for the year ended December 31,
1995 to $8.8 million for the year ended December 31, 1996. This decrease
resulted from lower parts and service sales at the Smyrna-based dealership.
Other dealership revenues increased $504,000 or 34.3%, from $1.5 million for the
year ended December 31, 1995 to $2.0 million for the year ended December 31,
1996. This increase was due primarily to higher documentation fee income.

Gross Profit. Gross profit increased by $2.2 million, or 21.9%, from $9.9
million for the year ended December 31, 1995 to $12.1 million for the year ended
December 31, 1996. This increase was attributable to higher overall revenues.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.8 million, or 18.5%, from $9.5 million for
the year ended December 31, 1995 to $11.3 million for the year ended December
31, 1996. This increase was primarily due to higher variable incentive pay
stemming from increased retail sales and higher charges for rents, bad debts and
professional fees.

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Interest Expense, net. Interest expense, net increased $89,000, or 74.2%,
from $120,000 for the year ended December 31, 1995 to $209,000 for the year
ended December 31, 1996. This increase was attributable to the increased
inventory of vehicles, principally used, at the Wade Ford Buford location.

Liquidity and Capital Resources

The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. The Wade Ford dealerships' principal sources of
liquidity are cash on hand, cash from operations and floorplan financing.

The following table sets forth historical selected information from the
Wade Ford Dealerships' statements of cash flows for the periods indicated:

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------- -------------------
1995 1996 1997 1997 1998
------- ------- ------- -------- --------
(IN THOUSANDS) (UNAUDITED)

Net cash provided by (used in) operating
activities............................. $ 1,078 $ 3,036 $ 2,472 $ 1,417 $ 1,476
Net cash provided by (used in) investing
activities............................. (727) (295) (185) (21) (6)
Net cash provided by (used in) financing
activities............................. (46) (60) (2,260) (1,297) (130)
------- ------- ------- ------- -------
Net increase (decrease) in cash and cash
equivalents............................ $ 305 $ 2,681 $ 27 $ 99 $ 1,340
======= ======= ======= ======= =======

Cash Flows

Total cash and cash equivalents at March 31, 1998 were $6.0 million.

For the three years ended December 31, 1997, the dealership generated $4.3
million in cash flow from net income plus depreciation and amortization. Net
cash flow from operating activities averaged $2.2 million during the three year
period. The increase in net cash provided by operating activities is due
primarily to positive net earnings and increased floorplan balances offset by
the effect of additions to inventory needed to support expanding
sales -- principally in new vehicles at both the Wade Ford Buford and Wade Ford
Smyrna locations.

Net cash provided by operations increased from $1.4 million in the three
months ended March 31, 1997 to $1.5 million in the three months ended March 31,
1998. This was attributable to reductions in inventory balances offset in part
by lower floorplan borrowings.

The change in net cash used in investing activities for the three years
ended December 31, 1997 was primarily attributable to capital expenditures for
renovations to the Wade Ford Smyrna showroom and service facility as well as
purchases of servicing equipment for both Wade Ford Dealership sites.

The change in net cash related to financing activities was primarily
attributable to increases in and repayments of long-term debt. In addition,
distributions to former shareholders (consistent with S-Corporation ownership)
aggregated $2.2 million for the three years ended December 31, 1997.

Floorplan Financing

The Wade Ford dealerships currently obtain floorplan financing for their
vehicle inventory primarily through Ford Motor Credit Corporation. As of March
31, 1998, these dealerships had approximately $24.1 million of outstanding
floorplan financing. The debt bears interest at the prime rate plus 100 basis
points. This interest can be reduced if the dealerships meet certain goals for
overall sales volume and retail contracts with Ford Motor Credit Corporation.
Ford Motor Company provides interest assistance to the dealerships including a
specified allowance for a vehicle's in-transit period and an amount that varies
by vehicle model.

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Interest expense on floorplan notes payable, before manufacturers' interest
assistance, totaled approximately $1.1 million, $2.4 million and $2.7 million
for the years ended December 31, 1995, 1996 and 1997, respectively.
Manufacturers' interest assistance, which is recorded as a reduction to interest
expense, amounted to $749,000, $2.1 million and $2.5 million for the years ended
December 31, 1995, 1996 and 1997, respectively.

Leases

The Wade Ford dealerships lease certain office equipment and the facilities
comprising their retail and service locations, including leases with related
parties, under long-term operating leases and on a month to month basis.
Management believes the lease terms approximate those that would be available
from third parties. Certain of the leases permit the lessee to cancel the lease
by giving notice for periods ranging from 60 to 180 days.

DAY'S CHEVROLET, INC.

Results of Operations

Day's Chevrolet consists of a Chevrolet dealership in Acworth, Georgia, a
city located in the suburbs of Atlanta. The dealership has served Acworth and
northeast Georgia since 1959. Mr. Calvin Diemer and Mr. Alvin Diemer, who owned
Day's Chevrolet prior to the Offering, have worked in the automotive retailing
industry for over 20 years and succeeded to the ownership of Day's Chevrolet in
a series of transactions ending in 1993. Mr. Calvin Diemer will continue to
serve as the Executive Manager of Day's Chevrolet following the Offering.

The following table sets forth selected financial data and such data as a
percentage of total revenues for the Day's Chevrolet dealership for the periods
indicated:

YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------- -------------------------------------
1996 1997 1997 1998
----------------- ------------------ ----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------- ------- -------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)

Revenues:
New vehicle sales......... $27,924 46.5% $ 28,806 47.0% $ 6,458 43.1% $ 6,559 44.9%
Used vehicle sales........ 21,073 35.1 21,781 35.5 5,965 39.9 5,297 36.3
Parts and service sales... 9,525 15.9 9,340 15.2 2,218 14.8 2,348 16.1
Other revenues, net....... 1,489 2.5 1,405 2.3 327 2.2 391 2.7
------- ----- -------- ----- ------- ----- ------- -----
Total revenues.... 60,011 100.0 61,332 100.0 14,968 100.0 14,595 100.0
Cost of sales............... 53,237 88.7 55,094 89.8 13,460 89.9 12,989 89.0
------- ----- -------- ----- ------- ----- ------- -----
Gross profit................ 6,774 11.3 6,238 10.2 1,508 10.1 1,606 11.0
Selling, general and
administrative expenses... 5,076 8.5 5,178 8.4 1,235 8.3 1,258 8.6
------- ----- -------- ----- ------- ----- ------- -----
Income from operations...... 1,698 2.8 1,060 1.8 273 1.8 348 2.4
Other income and expense:
Interest expense, net..... 123 0.2 100 0.2 36 0.2 19 0.1
Other income (expense),
net.................... 7 0.0 6 0.0 1 0.0 7 0.0
------- ----- -------- ----- ------- ----- ------- -----
Income before income
taxes..................... 1,582 2.6 966 1.6 238 1.6 336 2.3
Income tax expense.......... -- -- -- -- -- -- -- --
------- ----- -------- ----- ------- ----- ------- -----
Net income.................. $ 1,582 2.6% $ 966 1.6% $ 238 1.6% $ 336 2.3%
======= ======== ======= =======

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997

Revenues. Total revenues decreased $373,000, or 2.5%, from $15.0 million
for the three months ended March 31, 1997 to $14.6 million for the three months
ended March 31, 1998. New vehicle sales increased

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$101,000, or 1.6%, from $6.5 million for the three months ended March 31, 1997
to $6.6 million for the three months ended March 31, 1998. This increase was
primarily due to increased unit sales of new trucks offset partially by lower
unit sales of cars. New truck sales increased due to higher product availability
during the three months ended March 31, 1998. Used vehicle sales decreased
$668,000, or 11.2%, from $6.0 million for the three months ended March 31, 1997
to $5.3 million for the three months ended March 31, 1998. This decrease was due
primarily to decreased wholesale unit sales stemming from increased competition
in this segment. Parts and service sales increased $130,000, or 5.9%, from $2.2
million for the three months ended March 31, 1997 to $2.3 million for the three
months ended March 31, 1998. This increase was due primarily to increased parts
sales to rental car companies and increased service revenues. Other dealership
revenues increased $64,000, or 19.6%, from $327,000 for the three months ended
March 31, 1997 to $391,000 for the three months ended March 31, 1998. This
increase was due primarily to higher warranty sales.

Gross Profit. Gross profit increased $98,000 or 6.5%, from $1.5 million
for the three months ended March 31, 1997 to $1.6 million for the three months
ended March 31, 1998. This increase was primarily due to higher new truck sales,
a higher proportion of revenues from parts and service sales and increased
incentive rebates from the manufacturer.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $23,000, or 1.9%, from $1.2 million for the
three months ended March 31, 1997 to $1.3 million for the three months ended
March 31, 1998. This increase was primarily due to higher occupancy charges
offset partially by reduced compensation for sales supervision.

Interest Expense, net. Interest expense, net decreased $17,000, or 47.2%,
from $36,000 for the three months ended March 31, 1997 to $19,000 for the three
months ended March 31, 1998. This decrease was attributable to higher
manufacturer credits.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total revenues increased by $1.3 million, or 2.2%, from $60.0
million for the year ended December 31, 1996 to $61.3 million for the year ended
December 31, 1997. New vehicle sales increased $882,000, or 3.2% from $27.9
million for the year ended December 31, 1996 to $28.8 million for the year ended
December 31, 1997. This increase was primarily attributable to increased sales
of truck, sport utility and sports car vehicles. Used vehicle sales increased
$708,000, or 3.4%, from $21.1 million for the year ended December 31, 1996 to
$21.8 million for the year ended December 31, 1997. This increase resulted from
an increase in personnel and a continuing emphasis on the wholesale component of
used car sales. Parts and service sales decreased $185,000, or 1.9%, from $9.5
million for the year ended December 31, 1996 to $9.3 million for the year ended
December 31, 1997. This minor decrease resulted from a decrease in parts sales.
Other dealership revenues decreased $84,000, or 5.6%, from $1.5 million for the
year ended December 31, 1996 to $1.4 million for the year ended December 31,
1997. This decrease was due primarily to a reduction in finance and insurance
related income.

Gross Profit. Gross profit decreased by $536,000, or 7.9%, from $6.8
million for the year ended December 31, 1996 to $6.2 million for the year ended
December 31, 1997. This decrease was attributable to increases in costs greater
than the dealership's ability to raise its new car prices and a small decrease
in the margin realized in the parts and service area.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $102,000, or 2.0%, from $5.1 million for the
year ended December 31, 1996 to $5.2 million for the year ended December 31,
1997. This increase was primarily due to increased compensation charges for
incentive pay and expanded participation by employees in the dealership's 401(k)
plan.

Interest Expense, net. Interest expense, net decreased $23,000, or 18.7%,
from $123,000 for the year ended December 31, 1996 to $100,000 for the year
ended December 31, 1997. This decrease was attributable to faster inventory
turnover.

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Liquidity and Capital Resources

The Day's Chevrolet dealership's principal sources of liquidity are cash on
hand, cash from operations and floorplan financing.

The following table sets forth historical selected information from the Day
dealership's statements of cash flows for the periods indicated:

THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
----------------- ------------
1996 1997 1997 1998
------- ------- ----- ----
(IN THOUSANDS) (UNAUDITED)

Net cash provided by (used in) operating activities... $ 1,493 $ 2,216 $(680) $212
Net cash provided by (used in) investing activities... (144) (21) 8 (52)
Net cash provided by (used in) financing activities... (1,241) (1,825) 337 --
------- ------- ----- ----
Net increase (decrease) in cash and cash
equivalents......................................... $ 108 $ 370 $(335) $160
======= ======= ===== ====

Cash Flows

Total cash and cash equivalents at March 31, 1998 amounted to $1.4 million.

For the two years ended December 31, 1997, the Day's Chevrolet dealership
generated $3.0 million in cash flow from net income plus depreciation and
amortization. Net cash flow from operating activities increased from $1.5
million in 1996 to $2.2 million in 1997 due principally to the increase in the
outstanding balance under the floorplan arrangement offset by a smaller increase
in inventory balances.

Net cash flow from operating activities increased from ($680,000) for the
three months ended March 31, 1997 to $212,000 for the quarter ended March 31,
1998 due primarily to higher earnings and fluctuations in inventory balances and
floorplan borrowings.

The change in net cash used in investing activities for the two years ended
December 31, 1997 amounted to an aggregate of $165,000 and was primarily
attributable to capital expenditures for a sales and administration facility and
certain items of service equipment.

The change in net cash used in financing activities increased from $1.2
million in 1996 to $1.8 million in 1997 due to an increase in dividend
distributions to former shareholders.

Floorplan Financing

The Day's Chevrolet dealership currently obtains floorplan financing for
its vehicle inventory primarily through GMAC. As of March 31, 1998, the
dealership had approximately $9.0 million of outstanding floorplan financing.
The debt bears interest at prime plus 100 basis points and can be reduced
through a rebate program based on retail financing activity. In addition, the
floorplan interest charge is reduced by a manufacturer's support program based
on the cost and model of each vehicle purchased from the franchiser. Interest
expense on floorplan notes payable, before manufacturer's interest assistance,
totaled approximately $640,000 and $643,000 for the years ended December 31,
1996 and 1997, respectively. Manufacturer's interest assistance, which is
recorded as a reduction to interest expense, amounted to $551,000 and $587,000
for the years ended December 31, 1996 and 1997, respectively.

Leases

In September 1997, the dealership declared a dividend of its land and
buildings to its shareholders and executed a lease of such land and buildings
from partnerships owned by Messrs. Diemer and Diemer. The lease is for an
initial term expiring in February 2008. The lease terms provide for cancellation
of the lease by either the lessee or lessor upon 60 days notice.

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GRINDSTAFF, INC.

Results of Operations

Grindstaff, Inc. consists of Chrysler-Dodge-Plymouth-Jeep, Chevrolet and
Kia dealerships located in Elizabethton, Tennessee serving the northeast portion
of that state, including the Tri-Cities area, which consists of Bristol, Johnson
City, and Kingsport, Tennessee. Prior to the Offering, Grindstaff, Inc. was
majority-owned and managed by Mr. Steve Grindstaff and Mr. Wes Hambrick since
1987 and the business and its predecessors have served the east Tennessee market
area since the late 1950's. Mr. Hambrick has over 15 years of experience in the
automotive retailing industry and will continue to serve as the Executive
Manager of Grindstaff, Inc. following the Offering.

The following table sets forth selected financial data and such data as a
percentage of total revenues for the Grindstaff, Inc. dealerships for the
periods indicated:

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------------------------------- -------------------------------------
1995 1996 1997 1997 1998
----------------- ----------------- ----------------- ----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)

Revenues:
New vehicle sales........ $29,499 56.6% $31,714 56.3% $34,098 58.0% $ 7,083 52.8% $ 7,684 59.0%
Used vehicle sales....... 16,974 32.6 18,671 33.2 18,277 31.1 4,668 34.8 3,663 28.1
Parts and service
sales.................. 2,868 5.5 3,388 6.0 3,898 6.6 903 6.7 1,045 8.0
Other revenues, net...... 2,781 5.3 2,534 4.5 2,517 4.3 765 5.7 635 4.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total revenues..... 52,122 100.0 56,307 100.0 58,790 100.0 13,419 100.0 13,027 100.0
Cost of sales.............. 45,862 88.0 49,990 88.8 51,215 87.1 11,562 86.2 11,150 85.6
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit............... 6,260 12.0 6,317 11.2 7,575 12.9 1,857 13.8 1,877 14.4
Selling, general and
administrative
expenses................. 5,391 10.3 5,864 10.4 6,972 11.9 1,592 11.9 1,652 12.7
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations..... 869 1.7 453 0.8 603 1.0 265 1.9 225 1.7
Other income and expense:
Interest expense, net.... 168 0.3 421 0.6 432 0.6 137 1.0 119 1.0
Other income (expense)... (18) (0.0) (509) (0.9) 55 0.0 (8) (0.0) (8) (0.0)
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income (loss) before income
taxes.................... 683 1.4 (477) (0.7) 226 0.4 120 0.9 98 0.7
Income tax (expense)
benefit.................. (40) (0.1) 32 0.1 (13) (0.0) (12) (0.1) (5) (0.0)
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Net income (loss).......... $ 643 1.3% $ (445) (0.8)% $ 213 0.4% $ 108 0.8% $ 93 0.7%
======= ======= ======= ======= =======

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997

Revenues. Total revenues decreased $392,000, or 2.9%, from $13.4 million
for the three months ended March 31, 1997 to $13.0 million for the three months
ended March 31, 1998. New vehicle sales increased $601,000, or 8.5%, from $7.1
million for the three months ended March 31, 1997 to $7.7 million for the three
months ended March 31, 1998. This increase was primarily due to higher sales of
Dodge products (principally trucks) stemming from increased availability from
the manufacturer. Used vehicle sales decreased $1.0 million, or 21.5%, from $4.7
million for the three months ended March 31, 1997 to $3.7 million for the three
months ended March 31, 1998. This decrease was due primarily to the closing of
the Johnson City location in November 1997. Parts and service sales increased
$142,000, or 15.7%, from $903,000 for the three months ended March 31, 1997 to
$1.0 million for the three months ended March 31, 1998. This increase was due
primarily to higher service revenues stemming from additional advertising and an
emphasis on cross-selling opportunities. Other dealership revenues decreased
$130,000, or 17.0%, from $765,000 for the three months ended March 31, 1997 to
$635,000 for the three months ended March 31, 1998. This decrease was due to
reduced income from finance and insurance commissions.

Gross Profit. Gross profit increased $20,000, or 1.1%, from $1.9 million
for the three months ended March 31, 1997 to $1.9 million for the three months
ended March 31, 1998. This increase was primarily due to

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lower finance and insurance commission income and lower margins on used
wholesale activity offset in part by higher revenues from Dodge truck sales.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $60,000, or 3.8%, from $1.6 million for the
three months ended March 31, 1997 to $1.7 million for the three months ended
March 31, 1998. This increase was primarily due to higher charges for occupancy
expense, higher sales commission expense and higher advertising expense.

Interest Expense, net. Interest expense, net decreased $18,000, or 13.1%,
from $137,000 for the three months ended March 31, 1997 to $119,000 for the
three months ended March 31, 1998. This decrease was primarily attributable to
higher inventory turns.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total revenues increased by $2.5 million, or 4.4%, from $56.3
million for the year ended December 31, 1996 to $58.8 million for the year ended
December 31, 1997. New vehicle sales increased $2.4 million, or 7.5% from $31.7
million for the year ended December 31, 1996 to $34.1 million for the year ended
December 31, 1997. This increase was primarily attributable to higher sales at
the Grindstaff Chevrolet dealership and the impact of having the Kia dealership
for an entire year, and was offset partially by reduced sales of Plymouth and
Chrysler products. Used vehicle sales decreased $394,000, or 2.1%, from $18.7
million for the year ended December 31, 1996 to $18.3 million for the year ended
December 31, 1997. This decrease resulted from lower wholesale sales of used
automobiles. Parts and service sales increased $510,000, or 15.1%, from $3.4
million for the year ended December 31, 1996 to $3.9 million for the year ended
December 31, 1997. This increase continued a long-range trend and resulted from
increased wholesale sales to local body shops and mechanics as well as strong
customer acceptance of the dealership's service capabilities. Other Grindstaff
dealership revenues decreased $17,000, or 0.7%, from $2.5 million for the year
ended December 31, 1996 to $2.5 million for the year ended December 31, 1997.
This decrease resulted from lower finance and insurance income.

Gross Profit. Gross profit increased by $1.3 million, or 19.9%, from $6.3
million for the year ended December 31, 1996 to $7.6 million for the year ended
December 31, 1997. This increase was attributable to higher parts and service
sales, which generally has a higher margin and less reliance on wholesale sales
of used cars.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.1 million, or 18.9%, from $5.9 million for
the year ended December 31, 1996 to $7.0 million for the year ended December 31,
1997. This increase was primarily due to renovations to the used car facility
and increased incentive compensation based on gross profit performance.

Interest Expense, net. Interest expense, net increased $11,000, or 2.6%,
from $421,000 for the year ended December 31, 1996 to $432,000 for the year
ended December 31, 1997. This increase was attributable to lower average
inventory balances and reduced interest income from investments.

Other Income (expense). Other income (expense) decreased $564,000, or
110.8%, from $509,000 (expense) for the year ended December 31, 1996 to income
of $55,000 for the year ended December 31, 1997. This decrease was due to a 1996
lease termination fee amounting to $600,000 paid to a related party lessor. No
such fee was paid in 1997.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenues. Total revenues increased by $4.2 million, or 8.0%, from $52.1
million for the year ended December 31, 1995 to $56.3 million for the year ended
December 31, 1996. New vehicle sales increased $2.2 million, or 7.5% from $29.5
million for the year ended December 31, 1995 to $31.7 million for the year ended
December 31, 1996. This increase was primarily attributable to increased sales
of Chevrolet truck and sport utility van products and the addition of the Kia
dealership to Grindstaff, Inc. in October 1996. This increase was partially
offset by a reduction in unit sales of Chrysler and Plymouth products. Used
vehicle sales increased $1.7 million, or 10.0%, from $16.9 million for the year
ended December 31, 1995 to $18.7 million for

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the year ended December 31, 1996. This increase resulted from the opening of a
used car facility in Johnson City and added wholesale sales. Parts and service
sales increased $520,000, or 18.1%, from $2.9 million for the year ended
December 31, 1995 to $3.4 million for the year ended December 31, 1996. This
increase resulted from an expanded base of customers and aggressive marketing by
Grindstaff, Inc. in this area. Other Grindstaff, Inc. dealership revenues
decreased $247,000, or 8.9%, from $2.8 million for the year ended December 31,
1995 to $2.5 million for the year ended December 31, 1996. This decrease was due
primarily to reduced finance and insurance commission revenue.

Gross Profit. Gross profit increased by $57,000, or 0.9%, from $6.3
million for the year ended December 31, 1995 to $6.3 million for the year ended
December 31, 1996. Gross profit as a percent of sales decreased from 12.2% in
1995 to 11.4% in 1996. This was attributable to increased wholesale sales of
used vehicles, reduction in finance and insurance revenues and soft demand for
Chrysler new vehicle sales.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $473,000, or 8.8%, from $5.4 million for the
year ended December 31, 1995 to $5.9 million for the year ended December 31,
1996. This increase was primarily due to higher facility rent charges and
increased personnel costs associated with personnel additions.

Interest Expense, net. Interest expense, net increased $253,000, or 150%,
from $168,000 for the year ended December 31, 1995 to $421,000 for the year
ended December 31, 1996. This increase was attributable to lower inventory
turnover and the addition of the Kia dealership, which did not offer a
manufacturers' support program.

Other Income (expense). Other income (expense) increased $491,000, or
2700%, from $18,000 (expense) for the year ended December 31, 1995 to $509,000
(expense) for the year ended December 31, 1996. This increase was due to a lease
termination fee amounting to $600,000 paid to a related party lessor in 1996.

Liquidity and Capital Resources

The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. Grindstaff Inc.'s principal sources of liquidity
are cash on hand, cash from operations and floorplan financing.

The following table sets forth historical selected information from the
Grindstaff dealerships' statements of cash flows for the periods indicated:

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- -------------------
1995 1996 1997 1997 1998
------- ----- ------- -------- --------
(IN THOUSANDS) (UNAUDITED)

Net cash provided by (used in) operating
activities............................... $ 2,021 $(142) $ (944) $ (966) $ 389
Net cash provided by (used in) investing
activities............................... (390) (116) (158) (36) 44
Net cash provided by (used in) financing
activities............................... (124) (297) (38) 113 (4)
------- ----- ------- ------- -------
Net increase (decrease) in cash and cash
equivalents.............................. $ 1,507 $(555) $(1,140) $ (889) $ 429
======= ===== ======= ======= =======

Cash Flows

Total cash and cash equivalents at March 31, 1998 amounted to $722,000.

For the three years ended December 31, 1997, the Grindstaff dealerships
generated $1.1 million in cash flow from net income plus depreciation and
amortization. Net cash flow from operating activities declined from $2.0 million
in 1995 to $(944,000) in 1997. This decline is due primarily to the reduction in
net income

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during that period and smaller balances outstanding under the floorplan, offset
partially by reduced inventory levels.

The change in net cash used in investing activities for the three years
ended December 31, 1997 was primarily attributable to capital additions to the
management information system and certain items of service equipment.

The change in net cash related to financing activities was primarily
attributable to principal payments on long-term debt obligations and
transactions in the dealership's capital stock.

Floorplan Financing

Grindstaff Inc. currently obtains floorplan financing for its dealerships'
vehicle inventories primarily through GMAC and Chrysler Financial Corporation.
As of March 31, 1998, the dealership had approximately $9.5 million of
outstanding floorplan financing. The debt bears interest at rates ranging from
9.0% to 9.5% that are subject to reduction if the dealership meets certain
incentive benchmarks for retail financing contracts. In addition, the
dealerships receive manufacturers' interest support which varies by vehicle
model.

Interest expense on floorplan notes payable, before manufacturers' interest
assistance, totaled approximately $892,000, $1.0 million and $937,000 for the
years ended December 31, 1995, 1996 and 1997, respectively. Manufacturers'
interest assistance, which is recorded as a reduction to interest expense,
amounted to $592,000, $483,000 and $486,000 for the years ended December 31,
1995, 1996 and 1997, respectively.

Leases

The dealership leases its primary operating facilities under operating
leases which require the dealership to pay for maintenance, ad valorem taxes and
insurance. The leases do not contain cancellation or renewal options. Management
believes the rates and terms of all such leases are comparable to those that
would be available on an arm's-length basis. Certain items of equipment used in
the operations of Grindstaff, Inc.'s dealerships are leased under a master
operating lease arrangement and contain renewal and fair value purchase options.

ROBERTSON OLDSMOBILE-CADILLAC, INC.

Results of Operations

Robertson Oldsmobile-Cadillac, Inc. consists of four automotive dealerships
located in Gainesville, Georgia, a suburban city north of Atlanta. The
dealerships include Cadillac, Oldsmobile, Isuzu and Mazda, and the dealership
and its predecessors have served the Gainesville and north Georgia markets
continuously for more than five decades. Prior to the Offering, Mr. Moss
Robertson, who has over 20 years of experience in the automotive retailing
industry, had owned and managed this dealership group since 1982. Mr. Robertson
will remain as the Executive Manager of ROC subsequent to the Offering.

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The following table sets forth selected financial data and such data as a
percentage of total revenues for ROC dealership for the periods indicated:

YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------- --------------------------------------
1996 1997 1997 1998
----------------- ----------------- ----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)

Revenues:
New vehicle sales.................... $11,339 52.6% $12,145 51.7% $2,288 47.1% $2,583 45.5%
Used vehicle sales................... 7,443 34.5 8,114 34.5 1,774 36.5 2,328 41.0
Parts and service sales.............. 2,500 11.6 2,778 11.8 655 13.5 652 11.5
Other revenues, net.................. 286 1.3 473 2.0 142 2.9 115 2.0
------ ----- ------ ----- ------ ----- ------ -----
Total revenues................. 21,568 100.0 23,510 100.0 4,859 100.0 5,678 100.0
Cost of sales.......................... 18,517 85.9 20,535 87.3 4,202 86.5 4,918 86.6
------ ----- ------ ----- ------ ----- ------ -----
Gross profit........................... 3,051 14.1 2,975 12.7 657 13.5 760 13.4
Selling, general and administrative
expenses............................. 2,196 10.1 1,957 8.4 472 9.7 500 8.9
------ ----- ------ ----- ------ ----- ------ -----
Income from operations................. 855 4.0 1,018 4.3 185 3.8 260 4.5
Other income and expense:
Interest income, net................. 107 0.5 108 0.5 25 0.5 13 0.2
Other income (expense), net.......... 3 0.0 (4) (0.0) (3) (0.0) (6) (0.0)
------ ----- ------ ----- ------ ----- ------ -----
Income before income taxes............. 965 4.5 1,122 4.8 207 4.3 267 4.7
Income tax expense..................... -- -- -- -- -- -- -- --
------ ----- ------ ----- ------ ----- ------ -----
Net income............................. $ 965 4.5% $ 1,122 4.8% $ 207 4.3% $ 267 4.7%
====== ======= ====== ======

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997

Revenues. Total revenues increased $819,000, or 16.9%, from $4.9 million
for the three months ended March 31, 1997 to $5.7 million for the three months
ended March 31, 1998. New vehicle sales increased $295,000, or 12.9%, from $2.3
million for the three months ended March 31, 1997 to $2.6 million for the three
months ended March 31, 1998. This increase was primarily due to higher sales of
Oldsmobile products (unit increase of 43%) and higher average per unit sales for
Cadillac products. Used vehicle sales increased $554,000, or 31.2%, from $1.8
million for the three months ended March 31, 1997 to $2.3 million for the three
months ended March 31, 1998. This increase was due primarily to increased
promotions of used vehicles and increased use of selected remarketed vehicles.
Parts and service sales decreased $3,000, or 0.5%, from $655,000 for the three
months ended March 31, 1997 to $652,000 for the three months ended March 31,
1998. This decrease was due primarily to lower warranty and parts sales for both
Mazda and Isuzu resulting from increased competition. Other dealership revenues
decreased $27,000, or 19.0%, from $142,000 for the three months ended March 31,
1997 to $115,000 for the three months ended March 31, 1998. This decrease was
due to lower finance and insurance commissions stemming from a higher proportion
of leases among new vehicle sales.

Gross Profit. Gross profit increased $103,000, or 15.7%, from $657,000 for
the three months ended March 31, 1997 to $760,000 for the three months ended
March 31, 1998. This increase was primarily due to increased sales levels in
both new and used vehicles. The percentage gross margin decreased from 13.7% for
the three months ended March 31, 1997 to 13.4% for the three months ended March
31, 1998 due primarily to increased competition among new car dealers in the
market area.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $28,000, or 5.9%, from $472,000 for the three
months ended March 31, 1997 to $500,000 for the three months ended March 31,
1998. This increase was primarily due to higher sales commissions and higher
marketing expenses.

Interest Expense, net. Interest expense, net decreased $12,000, or 48.0%,
from $25,000 for the three months ended March 31, 1997 to $13,000 for the three
months ended March 31, 1998. This decrease was attributable to higher inventory
turns.

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Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total revenues increased by $1.9 million, or 9.0%, from $21.6
million for the year ended December 31, 1996 to $23.5 million for the year ended
December 31, 1997. New vehicle sales increased $806,000, or 7.1% from $11.3
million for the year ended December 31, 1996 to $12.1 million for the year ended
December 31, 1997. This increase was primarily attributable to higher sales of
Cadillac products, whose unit sales increased by over 35%. This increase was
partially offset by lower sales of Mazda and Isuzu products. Used vehicle sales
increased $671,000, or 9.0%, from $7.4 million for the year ended December 31,
1996 to $8.1 million for the year ended December 31, 1997. This increase
resulted from additional investments in space and personnel. Parts and service
sales increased $278,000, or 11.1%, from $2.5 million for the year ended
December 31, 1996 to $2.8 million for the year ended December 31, 1997. This
increase resulted from the overall increase in unit sales coupled with a
marketing emphasis on Cadillac service in the north Georgia area. Other
dealership revenues increased $187,000, or 65.4%, from $286,000 for the year
ended December 31, 1996 to $473,000 for the year ended December 31, 1997. This
increase was due primarily to higher finance and insurance related income.

Gross Profit. Gross profit decreased by $76,000, or 2.5%, from $3.1
million for the year ended December 31, 1996 to $3.0 million for the year ended
December 31, 1997. This minor decrease was attributable to the changing mix
among new retail sales and a strategic decision to expand the array of used
vehicles held for sale.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $239,000, or 10.9%, from $2.2 million for the
year ended December 31, 1996 to $2.0 million for the year ended December 31,
1997. This decrease was primarily due to a realignment of incentive pay plans
and the availability of a more attractive co-op advertising program with General
Motors.

Interest Income, net. Interest income, net increased $1,000, or 0.9%, from
$107,000 for the year ended December 31, 1996 to $108,000 for the year ended
December 31, 1997. This increase was attributable to higher returns on invested
cash and cash equivalents.

Liquidity and Capital Resources

The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. ROC's principal sources of liquidity are cash on
hand, cash from operations and floorplan financing.

The following table sets forth historical selected information from ROC's
statements of cash flows for the periods indicated:

THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
---------------- -------------
1996 1997 1997 1998
------ ------- ----- -----
(IN THOUSANDS) (UNAUDITED)

Net cash provided by (used in) operating activities... $1,232 $ 1,060 $ 37 $ 206
Net cash provided by (used in) investing activities... (48) (30) (4) (4)
Net cash provided by (used in) financing activities... (430) (1,416) (305) (270)
------ ------- ----- -----
Net increase (decrease) in cash and cash
equivalents......................................... $ 754 $ (386) $(272) $ (68)
====== ======= ===== =====

Cash Flows

Total cash and cash equivalents at March 31, 1998 were $2.1 million.

For the two years ended December 31, 1997, the ROC dealerships generated
$2.2 million in cash flow from net income plus depreciation and amortization.
Net cash flow from operating activities decreased from 1996 to 1997 by $173,000.
This decrease is due primarily to higher inventory levels offset in part by
higher earnings and higher borrowings under the floorplan arrangement.

Net cash flow from operating activities for the three months ended March
31, 1998 exceeded that of three months ended March 31, 1997 by $169,000 due to
higher earnings and higher floorplan borrowings.

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The change in net cash used in investing activities for the two years ended
December 31, 1997 was primarily attributable to capital expenditures for service
equipment, expanded used vehicle facilities and renovations to the principal
showroom facility.

The change in net cash related to financing activities was primarily
attributable to fluctuations in the amounts paid out as dividends consistent
with S-Corporation ownership.

Floorplan Financing

The ROC dealership currently obtains floorplan financing for vehicle
inventory primarily through GMAC. As of March 31, 1998, ROC had approximately
$2.6 million of outstanding floorplan financing. The debt bears interest at a
rate calculated using a formula based on the prime rate (ranging from 8.25% to
8.5% at December 31, 1997) and is subject to a rebate based on annual amounts of
principal outstanding. Interest expense on floorplan notes payable, before
manufacturer interest assistance, totaled approximately $199,000 and $261,000
for the years ended December 31, 1996 and 1997, respectively. Manufacturers'
interest assistance, which is recorded as a reduction to interest expense,
amounted to $155,000 and $194,000 for the years ended December 31, 1996 and
1997, respectively.

Leases

The ROC dealership leases its land and real estate facilities under a
long-term operating lease from Mr. Robertson at rates and terms which were
negotiated at arm's-length and management believes approximate those that would
result from negotiations with an unrelated third party. The lease expires in
March 2005, contains renewal options and is non-cancelable.

SOUTH FINANCIAL CORPORATION

Results of Operations

South Financial makes installment loans for the purchase of vehicles and
also purchases and services installment loans from selected automotive dealers
in three southeastern states. The receivables are collateralized by security
interests in the financed automobiles and are due from individuals who are
generally considered sub-prime credit risks. South Financial's loan portfolio
contains loans which were made both with recourse to the originating dealership
(30%) and without recourse (70%) and have terms not exceeding 48 months. The
business was founded in 1989 and was sold to the Company in January 1998. Mr.
Glynn Wimberly, who has 24 years of relevant experience in this industry, serves
as the chief executive officer of South Financial.

Revenues are realized for interest income, fees, loan discount income and
credit life insurance commissions. Operating funds are obtained under a
revolving credit agreement with a commercial lender.

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The following table sets forth selected financial data and such data as a
percentage of total revenues for South Financial for the periods indicated:

YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1995 1996 1997
---------------- ---------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------- -------
(DOLLARS IN THOUSANDS)

Revenues:
New vehicle sales............................ $ -- --% $ -- --% $ -- --%
Used vehicle sales........................... -- -- -- -- -- --
Parts and service sales...................... -- -- -- -- -- --
Other revenues, net.......................... 3,187 100.0 5,723 100.0 4,743 100.0
------ ----- ------ ----- ------- -----
Total revenues....................... 3,187 100.0 5,723 100.0 4,743 100.0
Selling, general and administrative expenses... 1,780 55.9 3,566 62.3 3,704 78.1
------ ----- ------ ----- ------- -----
Income from operations......................... 1,407 44.1 2,157 37.7 1,039 21.9
Other income and expense:
Interest expense............................. 978 30.6 1,416 24.7 1,420 29.9
Other income (expense)....................... -- -- -- -- -- --
------ ----- ------ ----- ------- -----
Income (loss) before income taxes.............. 429 13.5 741 13.0 (381) (8.0)
Income tax (expense) benefit................... (150) (4.7) (307) (5.4) 139 2.9
------ ----- ------ ----- ------- -----
Net income (loss).............................. $ 279 8.8% $ 434 7.6% $ (242) (5.1)%
====== ====== =======

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues. Total revenues decreased by $1.0 million, or 17.1%, from $5.7
million for the year ended December 31, 1996 to $4.7 million for the year ended
December 31, 1997. This decrease was primarily attributable to the introduction
of a dealer program in February 1997 involving smaller advance rates and the
elimination of recourse obligation by the dealers. This program resulted in a
22% decline in the outstanding loan balance and a smaller average loan balance
(from $5,606 at December 31, 1996 to $5,230 at December 31, 1997) and an
approximate 4% drop in the number of contracts being serviced (from 4,100 at
December 31, 1996 to 3,940 at December 31, 1997).

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $138,000, or 3.9%, from $3.6 million for the
year ended December 31, 1996 to $3.7 million for the year ended December 31,
1997. This increase was primarily due to a provision for credit losses in 1997
stemming from the elimination of recourse liability from dealers from whom the
contracts were purchased offset in part by savings generated by office and
personnel realignments.

Interest Expense. Interest expense increased by a nominal amount, or 0.3%,
from $1.4 million for the year ended December 31, 1996 to $1.4 million for the
year ended December 31, 1997. This minor increase reflects the consistent level
of borrowing outstanding under the revolving credit agreement.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenues. Total revenues increased by $2.5 million, or 79.6%, from $3.2
million for the year ended December 31, 1995 to $5.7 million for the year ended
December 31, 1996. This increase was primarily attributable to the expansion of
the business into new markets (North Carolina and Tennessee) made possible by
obtaining the revolving credit facility in June 1994, and the increase in
borrowings available under the facility in August 1995.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.8 million, or 100.3%, from $1.8 million or
the year ended December 31, 1995 to $3.6 million for the year ended December 31,
1996. This increase was primarily due to added field offices, establishing a
centralized underwriting function and additional rent charges associated with an
expanded data and accounting system.

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Interest Expense. Interest expense increased $438,000, or 44.8%, from $1.0
million for the year ended December 31, 1995 to $1.4 million for the year ended
December 31, 1996. This increase was attributable to an increase in the
principal amount outstanding under the revolving credit agreement from $8.2
million at December 31, 1995 to $11.6 million at December 31, 1996.

Liquidity and Capital Resources

The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. South Financial's principal sources of liquidity
are cash on hand, cash from operations and a revolving credit facility with
General Electric Credit Corporation (the "G.E. Credit Facility"). The revolving
credit facility has a maximum borrowing capacity of $15 million with advances
permitted under formulas based on percentages of eligible collateral.

As of March 31, 1998, South Financial was not in compliance with certain
terms of the G.E. Credit Facility; however, South Financial received a waiver of
this violation through September 30, 1998. As of the date of this Prospectus,
South Financial has cured this violation and now is in compliance with the G.E.
Credit Facility.

The following table sets forth historical selected information from South
Financial's statements of cash flows for the periods indicated:

YEAR ENDED DECEMBER 31,
---------------------------
1995 1996 1997
------- ------- -------
(IN THOUSANDS)

Net cash provided by (used in) operating activities....... $ 1,909 $ 1,155 $(1,785)
Net cash provided by (used in) investing activities....... (7,819) (4,858) 2,353
Net cash provided by (used in) financing activities....... 5,955 3,643 (508)
------- ------- -------
Net increase (decrease) in cash and cash equivalents...... $ 45 $ (60) $ 60
======= ======= =======

Cash Flows

Total cash and cash equivalents at December 31, 1997 amounted to $64,000.
Unused availability at that date under the revolving credit facility amounted to
$780,000.

For the three years ended December 31, 1997, the South Financial generated
$1.9 million in cash flow from net income plus depreciation and provision for
credit losses. Net cash flow from operating activities declined during this
three-year period from $1.9 million in 1995 to ($1.8 million) in 1997. The
decline is due primarily to the decrease in net earnings and the reduction in
the amount owed to dealers for contractual obligations. The amount owed dealers
for contractual obligations decreased due to the introduction of dealer programs
that do not have a recourse obligation.

The change in net cash used in investing activities for the three years
ended December 31, 1997 aggregated $10.3 million and ranged from a use of cash
of $7.8 million in 1995 to a source of cash amounting to $2.4 million in 1997.
The primary factors affecting this area are disbursements to vehicle dealerships
for originating contracts and principal payments received from borrowers. The
1997 dealer programs have resulted in a smaller average disbursement per loan
generated. Disbursements for capital expenditures have been minor.

The change in net cash related to financing activities was primarily
attributable to activity under the revolving credit facility. The aggregate
amount advanced under the facility for the three years ended December 31, 1997
amounted to $8.6 million and ranged from a net borrowing of $5.3 million in 1995
to a net repayment of $185,000 in 1997.

Credit Losses

South Financial maintains a reserve for potential credit losses ($2.0
million at December 31, 1997, or 20.7% of the outstanding principal balance as
of that date) based on pertinent factors including past

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experience, underlying collateral, recourse provisions and economic conditions.
South Financial staff members and agents follow up on delinquent accounts with
appropriate actions including correspondence and repossession of the applicable
collateral. South Financial charges potential credit losses back to the
originating used auto dealership if the contracts were purchased on a recourse
basis and sells repossessed collateral at auction. Proceeds from the sale of
collateral are credited to the loss reserve.

Leases

South Financial leases its operating facilities and equipment under various
operating leases, including leases with related parties. Certain of the leases
may be renewed at the option of the lessee. All of South Financial's leases were
negotiated at arm's-length, and the Company's management believes that the terms
and conditions of all of South Financial's leases are comparable to those that
result from negotiations with unrelated third parties.

CYCLICALITY

The Company's operations, like the automotive retailing industry in
general, can be affected by a number of factors relating to general economic
conditions, including consumer business cycles, consumer confidence, economic
conditions, availability of consumer credit and interest rates. Although the
above factors, among others, can impact the Company's business, the Company
believes the impact of cyclicality on its operations will be mitigated as the
Company continues to expand its product offerings, its geographic diversity and
the number of its vehicle brands.

As of the date of this Prospectus, the United Auto Workers union has
recently settled a labor action against GM. This strike has had a material
adverse effect on the production of GM vehicles. There can be no assurance that
GM's decreased production will not have a material adverse effect on the
Company's business, financial condition and results of operations.

EFFECTS OF INFLATION

Due to the relatively low levels of inflation in 1995, 1996 and 1997 and
the first three months of 1998, inflation did not have a significant effect for
those periods on the results of operations of the Company and the dealerships
that the Company owns or expects to acquire upon consummation of the Offering.

NEW ACCOUNTING STANDARDS

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share." This Statement
specifies the computation, presentation and disclosure requirements for earnings
per share. The Company believes that the adoption of such Statement would not
result in earnings per share materially different from pro forma earnings per
share presented in the accompanying statements of income.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This
standard establishes standards of reporting and display of comprehensive income
and its components in a full set of general-purpose financial statements. This
Statement will be effective for the Company's fiscal year ending June 30, 1998,
and the Company does not intend to adopt this statement prior to said effective
date.

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BUSINESS

Sunbelt has no current operations other than the activities involved in
identifying potential target companies, negotiating the related acquisition
agreements and preparing for the proposed Merger and Acquisitions. Although
certain members of Sunbelt's management have significant automotive retailing
industry experience, Sunbelt has not managed the combined businesses, and the
proposed Merger and certain of the Acquisitions will not occur until the
consummation date of this Offering. Accordingly, any references herein to
"Sunbelt" or the "Company" and the activities and characteristics of the
combined entities should be read as pro forma descriptions of those activities
and characteristics following the consummation of the proposed Merger and all of
the Acquisition transactions.

OVERVIEW

Upon the consummation of the Merger and all of the Acquisitions, Sunbelt
expects to be one of the leading retailers of new and used vehicles in the
southeastern United States. The Company will operate a total of 31 dealership
franchises in Georgia, North Carolina and Tennessee and four collision repair
centers in metropolitan Atlanta, Georgia. Sunbelt will sell 20 domestic and
foreign brands of automobiles, which consist of Buick, Cadillac, Chevrolet,
Chrysler, Dodge, Ford, GMC, Honda, Hummer, Isuzu, Jeep, Kia, Mazda, Mercury,
Mitsubishi, Nissan, Oldsmobile, Plymouth, Pontiac and Toyota. In 1997, based on
pro forma retail new vehicle unit sales, the Company believes it would have
ranked 13th on the Automotive News' listing of the 1997 top 100 dealer groups in
the United States. The Company intends to further diversify its product and
service offerings by including more brands of vehicles and by offering related
finance and insurance, replacement parts, collision repair, and other products
and services that are complementary to its core automotive retailing operations.
The Company's strategy is: (i) to become the leading operator of automotive
dealerships in small and medium-sized markets in the southeastern United States
through acquisitions of additional dealerships in these markets; and (ii) to
expand its collision center and other complementary business operations.

INDUSTRY OVERVIEW

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franchised dealers alone, total revenues increased 53.5% from $320.0 billion in
1990 to $491.1 billion in 1996, total gross profits increased 33.3% from $46.9
billion in 1990 to $62.5 billion in 1996, and income before taxes increased
131.3% from $3.2 billion in 1990 to $7.4 billion in 1996.

The industry has been experiencing a consolidation trend which has seen the
number of franchised dealerships in the United States decline from approximately
36,000 in 1960 to 22,750 in 1996. Despite the trend toward consolidation,
fragmentation is still a defining characteristic of the industry, with the
largest 100 franchised dealership groups generating less than 10% of 1996 total
franchised dealership revenue and controlling less than 5% of all franchised
automotive dealerships in 1996. However, as a result of the increasing capital
requirements necessary to operate an automotive dealership, the management
succession planning concerns of many current dealers and other economic and
industry factors, the Company expects a further consolidation of the automotive
retailing industry.

BUSINESS STRATEGY

Sunbelt intends to establish itself as the leading operator of automotive
dealerships in small and medium-sized markets in the southeastern United States
through acquisitions of additional dealerships in these markets. The Company
believes that its diverse portfolio of brands and dealerships in several of
these markets and its experienced management teams will give it a competitive
advantage in achieving this goal.

Operating Strategy

The Company intends to pursue an operating strategy based on the following
key elements:

- Offer a Diverse Range of Automotive Products and Services. The Company
will offer a diverse range of automotive products and services, including
a wide selection of new and used vehicles, vehicle financing and
insurance programs, replacement parts, and maintenance and repair
programs. The Company believes that its brand and product diversity will
enable the Company to satisfy a variety of customers, reduce dependence
on any one manufacturer and reduce exposure to supply problems and
product cycles. The Company believes that its variety of complementary
products and services will allow the Company to generate incremental
revenue that will result in higher profitability and less cyclicality for
the Company than if it were solely dependent on automobile sales.

- Institute Divisional Organization by Manufacturer. The Company intends
to institute a corporate organizational form which the Company believes
will differentiate it from most other automotive retailing companies. The
Company intends to organize its dealerships and dealership groups by
manufacturer, so that all dealerships which carry a particular
manufacturer's brands would be grouped together in a single division.
Each division, in turn, would be headed by a member of corporate
management who has extensive working experience with the applicable
manufacturer. The Company initially intends to implement this
organizational structure only for its Ford and Mercury dealerships. Once
the Company owns an appropriate number of dealerships affiliated with
another single manufacturer and the Company has achieved an appropriate
sales volume with respect to such manufacturer's vehicles, the Company
intends to implement this organizational structure for such dealerships.
The Company believes that such a corporate structure does not require any
manufacturer's approval and will not impact any other dealership
requirements imposed by manufacturers. However, the Company does not know
if any manufacturers, other than Ford, agree with this interpretation,
and therefore, the Company intends to seek the approval of all applicable
manufacturers prior to implementing such a structure with respect to each
such manufacturer's dealerships. As of the date of this Prospectus, the
Company has neither sought, nor received, the approval of any
manufacturer, other than Ford, for its implementation of such a
structure. Ford has approved the Company's organizational structure for
its Ford and Mercury dealerships as part of its contingent approval of
the Company's acquisitions of the Ford and Mercury dealerships. The
Company believes that organizing its dealerships by manufacturer and
having each division headed by a senior manager who is experienced with
that particular manufacturer -- and has established and maintained
long-standing business relationships with the regional and corporate
managers of that manufacturer -- will yield numerous benefits to the
Company. For example, the Company's relationships with each manufacturer
will be enhanced; management training within each division will be more
efficient and consistent; and

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managers within each division will benefit from a shared experience base.
The Company believes that these benefits will provide a competitive
advantage to the Company.

- Decentralize Marketing Strategies; Achieve High Levels of Customer
Satisfaction; Utilize Incentive-Based Compensation Programs. The Company
believes that many customers purchase automotive vehicles based on an
established long-term business relationship with a particular dealership.
Therefore, the Company intends to empower its experienced local
management -- who have a better in-depth knowledge of local customer
needs and preferences -- to establish marketing, advertising and other
policies that foster these long-term relationships and result in superior
customer service. The Company's strategy emphasizes the retention of the
local management of acquired dealerships, which the Company believes will
help make it an attractive acquiror of other dealerships. The Company
also intends to create incentives for entrepreneurial management teams at
the dealer level through the use of stock options and other programs in
order to align local management's interests with those of the Company's
shareholders. In order to keep local management focused on customer
satisfaction, the Company also intends to include certain CSI results as
a component of its incentive compensation program. The Company believes
that this is important because some manufacturers offer specific
performance incentives, on a per vehicle basis, if certain CSI levels
(which vary by manufacturer) are achieved by a dealer.

- Centralize Administrative Functions. The Company believes that
consolidation of certain dealership functions and requirements will
result in significant cost savings. The Company intends to restructure
its floorplan financing, which the Company anticipates will result in an
overall reduced interest rate on such financing. Specifically, the
Company estimates that this rate will be approximately 50 to 75 basis
points below the Company's current average annual floorplan rates, and
expects that this lower rate will result in annual cost savings of
$750,000 to $1 million. In addition to the floorplan financing, the
Company is also negotiating a revolving credit facility. Furthermore, the
Company expects that significant cost savings will be achieved through
the consolidation of administrative functions such as risk management,
employee benefits and employee training.

Growth Strategy

The Company plans to grow its business using a strategy comprised of the
following principal elements:

- Acquire Dealerships. The Company's goal is to become the leading
operator of automotive dealerships in small and medium-sized markets in
the southeastern United States through acquisitions of additional
dealerships in these markets. The Company plans to pursue acquisitions in
markets where it does not currently own dealerships, as well as in areas
which are contiguous to its existing dealership markets. The Company
intends to focus on acquiring both dealer groups with multiple franchises
in a given market area and dealers with a single franchise which possess
significant market shares. Generally, the Company will seek to retain the
acquired dealerships' operational and financial management, and thereby
benefit from their market knowledge, name recognition and local
reputation.

- Expand Complementary Products and Services. The Company intends to
pursue opportunities that it expects will result in additional revenue
and higher profitability through the sale of products and services which
complement its dealership operations. Examples of such opportunities
include the following:

Collision Repair Centers. The Company owns four collision repair
facilities operated under the name Collision Centers USA, which serve
the Jonesboro, Duluth, Stockbridge and Marietta, Georgia markets. The
Company expects to expand this business by increasing volumes at
these four centers, developing new centers and acquiring existing
centers. The Company's collision repair business provides higher
margins than its core automotive retailing operations and is
generally not significantly affected by economic cycles or consumer
spending habits.

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agreement with a leading insurance carrier to share in certain
revenues generated by the sale of extended warranty contracts. In
addition, in January 1998, the Company acquired South Financial,
which has been primarily engaged in the sub-prime automotive lending
business for the past eight years. The Company expects its dealer
network to provide additional loan business opportunities to South
Financial.

DEALERSHIP OPERATIONS

The Company has established a management structure that promotes and
rewards entrepreneurial spirit, individual pride and responsibility and the
achievement of team goals. Each dealership's general manager is ultimately
responsible for the operation, personnel and financial performance of the
dealership. The general manager ("Executive Manager") is typically complemented
with a management team consisting of a new vehicle sales manager, used vehicle
sales manager, service and parts manager and finance manager. Each dealership is
operated as a distinct profit center in which the Executive Manager is given a
high degree of operating autonomy. A controller who is dedicated to each
dealership provides financial oversight and control. The Company believes that
the Executive Manager and the other members of the dealership management team,
who in many cases are long-time members of their local communities, are best
able to judge how to conduct day-to-day operations based on the team's
experience in and familiarity with its local market.

The Company intends to organize its dealerships and dealership groups by
manufacturer, so that all dealerships which carry a particular manufacturer's
brands will be grouped together into a single division. Each division, in turn,
will be headed by a Vice President of each manufacturer division ("Division VP")
who has extensive working experience with the applicable manufacturer and will
report to the Company's Chief Operating Officer. The Division VP's role will be
to support the Executive Managers of each dealership that falls within the
Division VP's division. All Executive Managers will report to the Company's
Division VP on a regular basis and prepare a comprehensive monthly financial and
operating statement of their dealership. In addition, the Division VPs will meet
on a monthly basis with their Executive Managers to address changing customer
preferences and operational concerns and to share best practices. The Company
initially intends to implement this organizational structure only for its Ford
and Mercury dealerships. Once the Company owns an appropriate number of
dealerships affiliated with another single manufacturer and the Company has
achieved an appropriate sales volume with respect to such manufacturer's
vehicles, the Company intends to implement this organizational structure for
such dealerships. The Company believes that such a corporate structure does not
require any manufacturer's approval and will not impact the dealership
requirements imposed by the manufacturers. However, the Company does not know if
any manufacturers, other than Ford, agree with this interpretation, and
therefore, the Company intends to seek the approval of all applicable
manufacturers prior to implementing such a structure with respect to each such
manufacturer's dealerships. As of the date of this Prospectus, the Company has
neither sought, nor received, the approval of any manufacturer, other than Ford,
for its implementation of such a structure. Ford has approved the Company's
organizational structure for its Ford and Mercury dealerships as part of its
contingent approval of the Company's acquisitions of the Ford and Mercury
dealerships.

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NEW VEHICLE SALES

The Company sells 20 domestic and foreign brands of economy, family, sports
and luxury cars and light trucks and sport utility vehicles. The Company intends
to pursue an acquisition strategy that will continue to enhance its brand
diversity. The following tables set forth certain pro forma combined total sales
revenues and cost of goods sold information relating to the new vehicles sold by
dealerships that the Company owns or expects to acquire upon consummation of the
Offering categorized by manufacturer (dollars in thousands):

NINE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
-------------------- --------------------
SALES % OF SALES SALES % OF SALES
-------- ---------- -------- ----------

YEAR ENDED JUNE 30,
------------------------------------------------------------------
1995 1996 1997
-------------------- -------------------- --------------------
COSTS % OF COSTS COSTS % OF COSTS COSTS % OF COSTS
-------- ---------- -------- ---------- -------- ----------

NINE MONTHS ENDED MARCH 31,
-------------------------------------------
1997 1998
-------------------- --------------------
COSTS % OF COSTS COSTS % OF COSTS
-------- ---------- -------- ----------

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

(1) Ford includes both the Ford division and the Mercury division.

(2) General Motors includes the divisions of Buick, Cadillac, Chevrolet, GMC,
Oldsmobile and Pontiac.

(3) Boomershine Automotive divested its Subaru franchise during the fiscal year
ended June 30, 1996.

The Company's new vehicle sales will include traditional new vehicle retail
sales and retail lease transactions which are arranged by the Company. New
vehicle leases generally have short terms, which bring the consumers back to the
market sooner than if the vehicles were purchased. In addition, leases can
provide the Company with a steady source of late-model, off-lease vehicles for
its used vehicle inventory. Generally, leased vehicles remain under factory
warranty for the term of the lease, which will allow the Company to provide
repair service to the lessee throughout the lease term.

The Company will seek to provide customer-oriented service designed to
establish lasting relationships that will result in repeat and referral
business. For example, the Company's dealerships will strive to: (i) employ more
efficient selling approaches; (ii) utilize computer technology that decreases
the time necessary to purchase a vehicle; (iii) engage in extensive follow-up
after a sale in order to develop long-term relationships with customers; and
(iv) train their sales staffs to be able to meet the needs of the customers. The
Company will continually evaluate ways to improve the buying experience for its
customers and believes

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that its ability to share best practices among its dealerships will give it an
advantage over smaller dealership groups.

The Company will acquire substantially all its new vehicle inventory from
manufacturers. Manufacturers' allocations of new vehicle units are based upon
calculations by the manufacturers which, among other things, include factors
which may require the Company to purchase a larger number of less desirable
models than it would otherwise purchase in order to obtain a sufficient
allocation of the most popular vehicles (a concept commonly known in the
automotive retailing industry as "turn and earn"). Although the other bases for
such calculations are not disclosed to the Company, the Company believes that
additional factors considered by the manufacturers for such calculations include
the applicable dealership's unit sales volumes in prior months. The Company will
finance its inventory purchases through revolving credit arrangements known in
the industry as floorplan facilities.

The following table presents combined pro forma information with respect to
the new vehicle sales of the dealerships that the Company owns or expects to
acquire upon consummation of the Offering for the years ended June 30, 1995,
1996 and 1997, and the nine months ended March 31, 1997 and 1998, respectively.

PRO FORMA COMPANY'S NEW VEHICLE DATA
--------------------------------------------------------
NINE MONTHS
YEAR ENDED JUNE 30, ENDED MARCH 31,
New Vehicle Data -------------------------------- --------------------
1995 1996 1997 1997 1998
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)

Retail unit sales................... 19,493 21,694 20,499 14,851 14,583
Retail sales........................ $357,221 $403,877 $420,019 $306,737 $315,697
Gross profit........................ $ 18,763 $ 19,880 $ 21,017 $ 15,623 $ 15,658
Gross margin........................ 5.3% 4.9% 5.0% 5.1% 5.0%
Average gross profit per retail unit
sold.............................. $ 963 $ 916 $ 1,025 $ 1,052 $ 1,074

USED VEHICLE SALES

The Company will sell used vehicles at each of its dealerships. Consumer
demand for used vehicles has increased as prices of new vehicles have risen and
as more high quality used vehicles have become available. Furthermore, used
vehicles typically generate higher gross margins than new vehicles because of
their limited comparability and the somewhat subjective nature of their
valuation. The Company intends to grow its used vehicle sales operations by
maintaining a high quality inventory, providing competitive prices and extended
service contracts for its used vehicles and continuing to promote used vehicle
sales.

Profits from sales of used vehicles are dependent primarily on the ability
of the Company's dealerships to obtain a high quality supply of used vehicles
and effectively manage that inventory. The Company's new vehicle operations will
provide the Company's used vehicle operations with a large supply of high
quality trade-ins and off-lease vehicles, which are the best sources of high
quality used vehicles. The Company will supplement its used vehicle inventory
with used vehicles purchased at auctions.

The Company will generally maintain a 60- to 90-day supply of used vehicles
and will dispose of used vehicles that the Company does not intend to retail to
customers by selling them at auctions or offering them to wholesalers. Trade-ins
may be transferred among dealerships to provide balanced inventories of used
vehicles at each of the Company's dealerships. The Company does not need
manufacturers' approvals to transfer its used vehicles among its dealerships.
The Company believes that acquisitions of additional dealerships will expand its
internal market for transfers of used vehicles among its dealerships and
increase the ability of each of the Company's dealerships to offer the same
brand of used vehicles as it sells new and to maintain a balanced inventory of
used vehicles. The Company intends to develop integrated computer inventory
systems that will allow it to coordinate vehicle transfers among its
dealerships.

The Company believes that franchised dealerships, such as those which will
be operated by the Company, have certain strengths that non-franchised used-car
sales outlets do not have in offering used vehicles, including the following:
(i) access to trade-ins on new vehicle purchases, which are typically lower
mileage

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and higher quality relative to trade-ins on used car purchases, (ii) access to
late-model, low mileage off-lease vehicles, and (iii) the availability of
manufacturer certification and extended manufacturer warranties for the
Company's higher quality used vehicles. This supply of high quality trade-ins
and off-lease vehicles is expected to reduce the Company's dependence on auction
vehicles, which are typically a higher cost source of used vehicles.

The following table represents pro forma information with respect to the
used vehicle sales of the dealerships that the Company owns or expects to
acquire upon consummation of the Offering for the years ended June 30, 1995,
1996 and 1997, and the nine months ended March 31, 1997 and 1998, respectively:

PRO FORMA COMPANY'S USED VEHICLE DATA
------------------------------------------------------
NINE MONTHS
YEAR ENDED JUNE 30, ENDED MARCH 31,
Used Vehicle Data -------------------------------- ------------------
1995 1996 1997 1997 1998
-------- -------- -------- ------- -------
(DOLLARS IN THOUSANDS)

Retail unit sales..................... 9,073 10,205 9,913 7,392 7,134
Retail sales.......................... $100,563 $122,464 $120,534 $89,217 $92,148
Gross profit.......................... $ 8,858 $ 11,281 $ 11,635 $ 8,246 $ 8,061
Gross margin.......................... 8.8% 9.2% 9.7% 9.2% 8.7%
Average gross profit per retail unit
sold................................ $ 976 $ 1,105 $ 1,174 $ 1,115 $ 1,130
Wholesale unit sales.................. 8,033 8,665 9,442 7,117 5,642
Wholesale sales....................... $ 42,238 $ 44,512 $ 57,391 $42,881 $34,978
Gross profit.......................... $ 1,638 $ 1,057 $ 1,554 $ 690 $ 590
Gross margin.......................... 3.9% 2.4% 2.7% 1.6% 1.7%

PARTS AND SERVICE SALES

The Company will provide parts and service at each of its dealerships
primarily for the vehicle makes sold by its dealerships. The Company will also
provide maintenance and repair services at each of its dealerships and collision
repair centers, and will perform both warranty and customer-paid service work.

Historically, the automotive repair industry has been highly fragmented.
However, the Company believes that the increased use of advanced technology in
vehicles has made it more difficult for independent repair shops to retain the
expertise to perform major or technical repairs. Additionally, manufacturers
permit warranty work to be performed only at dealerships. Therefore, unlike
independent service stations, or independent and superstore used car dealerships
with service operations, the Company's dealerships will be qualified to perform
work covered by manufacturer warranties. Given the increasing technological
complexity of motor vehicles and the trend toward extended manufacturer and
dealer warranty periods for new vehicles, the Company believes that an
increasing percentage of repair work will be performed at dealerships.

The Company seeks to retain each purchaser of a vehicle as a customer of
the Company's service and parts departments. The Company's dealerships will have
systems in place that track their customers' maintenance records and notify
owners of vehicles purchased at the dealerships when their vehicles are due for
periodic services. The Company regards its service and repair activities as an
integral part of its overall approach to customer service, providing an
opportunity to foster ongoing relationships with its customers and deepen
customer loyalty.

The dealerships' parts departments support their respective sales and
service divisions. Each of the dealerships that the Company owns or expects to
acquire upon consummation of the Offering sells factory-approved parts for
vehicle makes and models sold by that dealership. These parts are either used in
repairs made by the dealerships or sold at retail to its customers or at
wholesale to independent repair shops and/or other franchised dealerships.
Currently, each of the dealerships that the Company owns or expects to acquire
upon consummation of the Offering employs its own parts manager and
independently controls its parts inventory and sales.

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The following table sets forth information regarding the parts and service
sales of the dealerships that the Company owns or expects to acquire upon
consummation of the Offering for the years ended June 30, 1995, 1996 and 1997,
and the nine months ended March 31, 1997 and 1998, respectively:

PRO FORMA COMPANY'S PARTS AND SERVICE DATA
---------------------------------------------------
NINE MONTHS
YEAR ENDED JUNE 30, ENDED MARCH 31,
Parts and Service Data ----------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)

COLLISION REPAIR

The Company operates four standalone collision repair centers under the
service mark "Collision Centers USA." The Company began operating the first of
these centers in September 1996 and acquired three additional centers in
November 1997 as part of the Collision Centers USA Acquisition. The Company
believes that the primary source of Collision Centers USA's customers will be
the automobile insurance companies which have entered into direct repair
programs with Collision Centers USA. As of March 31, 1998, Collision Centers USA
had entered into arrangements with seven insurance companies to participate in
their various direct repair programs. In general, these arrangements provide
procedures and guidelines for handling claims, providing estimates and
completing certain paperwork for the individual insurance company, as well as
hourly labor rates for mechanical, body repair, refinishing and painting, and
markups and discounts for used and new parts. The Company believes that these
insurance companies -- by virtue of the customers they refer to Collision
Centers USA -- will be the primary source of the Company's collision repair
center business, and that its ongoing relationship with these insurance
companies will help ensure a continuous and increasing source of customers for
Collision Centers USA. The Company believes that its collision repair business
will provide favorable margins and will not be significantly affected by
business cycles or consumer preferences. The Company also believes that its
development and operation of collision repair centers will provide incremental
parts business to its dealerships. For the three-year period ended June 30,
1997, and the nine months ended March 31, 1998, Collision Centers USA's revenues
have accounted for less than one percent of the total combined pro forma
revenues of the Company.

FINANCE AND INSURANCE

The Company will offer its customers a wide range of financing and leasing
alternatives for the purchase of vehicles. In addition, as part of each sale,
the Company will offer customers credit life, accident and health and disability
insurance to cover the financing cost of their vehicles, as well as warranty or
extended service contracts. The Company's pro forma revenue from financing,
insurance and extended warranty transactions was $17.4 million for the year
ended June 30, 1997 and $13.5 million for the nine months ended March 31, 1998.

The Company believes that its customers' ability to obtain financing at its
dealerships will significantly enhance the Company's ability to sell new and
used vehicles. The Company will provide a variety of financing and leasing
alternatives in order to meet the specific needs of each potential customer. The
Company believes its ability to obtain customer-tailored financing on a "same
day" basis will provide it with an advantage over many of its competitors,
particularly smaller competitors which do not generate sufficient volume to
attract the diversity of financing sources that are available to the Company.
Each dealership will then be able to provide a customer with a broader array of
lease payment alternatives and, consequently, appeal to a term buyer who is
trying to purchase a vehicle of choice at or below a specific monthly payment.

In January 1998, the Company acquired a sub-prime automotive finance
company, South Financial, a Florida corporation with offices in Florida,
Tennessee and North Carolina. South Financial makes installment loans for the
purchase of vehicles and also purchases and services installment loans from
select automotive

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dealers in three southeastern states. The Company expects that its dealership
network will provide South Financial with a steady source of loan business
opportunities and that South Financial will provide each of the Company's
dealerships an ongoing sub-prime financing source.

The following tables set forth information regarding South Financial's
operations:

AS OF DECEMBER 31,
--------------------- AS OF MARCH 31,
1996 1997 1998
--------- --------- ---------------
(DOLLARS IN THOUSANDS)

Principal balance of outstanding loans............. $17,141 $14,883 $15,821
Number of outstanding loans........................ 4,100 3,940 3,854
Periods of delinquency:
31 to 60 days.................................... 5.5% 5.6% 3.7%
61 days or more.................................. 4.3% 3.1% 2.0%
------- ------- -------
Total delinquencies as a percentage of the current
principal balance of outstanding loans(1)(2)..... 9.8% 8.7% 5.7%
======= ======= =======

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

(1) The portfolio balance in 1996 was on a full recourse basis. Starting in
February 1997 all loans were purchased on a non-recourse basis.

(2) At March 31, 1998 a survey of seven publicly traded companies involved in
sub-prime automotive financing conducted by the Company using
publicly-available information yielded average delinquencies of 3.55% for
31-60 days and 3.75% for 61 days or more. The Company believes that this
comparative group generally lends to better credit risks than does the
Company.

FOR THE THREE
FOR THE YEAR ENDED MONTHS ENDED
DECEMBER 31, MARCH 31,
------------------- ---------------
1996 1997 1997 1998
-------- -------- ------ ------
(DOLLARS IN THOUSANDS)

Number of loans purchased................................ 3,982 4,122 636 761
Principal balance of loans purchased..................... $19,910 $22,671 $3,218 $5,212
Average principal balance of loans purchased............. $ 5.0 $ 5.5 $ 5.1 $ 5.5
Average portfolio yield.................................. 29.9% 28.1% 27.5% 27.9%
Average cost of funds.................................... 11.5% 10.7% 10.6% 11.0%

In addition to its financing activities, the Company will offer extended
service contracts in connection with the sale of new and used vehicles. Extended
service contracts on new vehicles supplement the warranties offered by the
vehicle manufacturers, and on used vehicles, such contracts supplement any
remaining manufacturer warranty or serve as the primary service contract on the
vehicle. The Company has recently entered into an agreement with a leading
insurance carrier to share in certain revenues generated by the sale of extended
warranty contracts. The extended service contracts sold by the dealerships that
the Company owns or expects to acquire upon consummation of the Offering, in the
aggregate, accounted for less than one percent of the Company's total pro forma
combined revenues for the three-year period ended June 30, 1997 and for the nine
months ended March 31, 1998. The Company will also offer its customers credit
life, health and accident insurance when they finance an automobile purchase,
and receives a commission on each policy sold.

SALES AND MARKETING

The Company expects that its marketing and advertising activities will vary
among its dealerships and among its markets. The Company expects to advertise
primarily through newspapers, radio, television and direct mail and to regularly
conduct special promotions designed to focus vehicle buyers on its product
offerings. The Company intends to tailor its marketing efforts to the relevant
marketplace in order to reach the Company's targeted customer base. The Company
intends to employ computer technology to aid salespeople in identifying
potential new customers. Under arrangements with each of the manufacturers, the
Company

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will receive a subsidy for a portion of its advertising expenses incurred in
connection with a manufacturer's vehicles. Because of the Company's leading
market presence in certain markets, the Company believes it has been able to
realize cost savings on its advertising expenses due to volume discounts and
other concessions from media, and the Company expects such cost savings to
continue in the future.

RELATIONSHIPS WITH MANUFACTURERS

Each of the dealerships that the Company owns or expects to acquire upon
consummation of the Offering operates under a separate Franchise Agreement which
governs the relationship between the dealership and the manufacturer. In
general, each Franchise Agreement specifies the location of the dealership for
the sale of vehicles and for the performance of certain approved services in a
specified market area. The designation of such areas generally does not
guarantee exclusivity within a specified territory. In addition, most
manufacturers allocate vehicles on a "turn and earn" basis which rewards high
volume. A Franchise Agreement typically requires the dealer to meet specified
standards regarding showrooms, the facilities and equipment for servicing
vehicles, inventories, minimum net working capital, personnel training, and
other aspects of the business. The Franchise Agreement with each dealership also
gives each manufacturer the right to approve the dealership's general manager
and any material change in management or ownership of the dealership. Each
manufacturer may terminate a Franchise Agreement under certain circumstances,
such as a change in control of the dealership without manufacturer approval, the
impairment of the reputation or financial condition of the dealership, the
death, removal or withdrawal of the dealership's general manager, the conviction
of the dealership or the dealership's owner or general manager of certain
crimes, a failure to adequately operate the dealership or maintain wholesale
financing arrangements, insolvency or bankruptcy of the dealership or a material
breach of other provisions of the Franchise Agreement. In connection with the
Offering, the Company is seeking to amend or replace its Franchise Agreements
which would have prohibited the Company from selling its common stock to the
public. See "Description of Capital Stock -- Georgia Law, Certain Articles and
Bylaw Provisions and Certain Franchise Agreement Provisions."

Most automobile manufacturers are still developing their policies regarding
public ownership of dealerships. Based upon the Company's own dealings with
various automobile manufacturers during the 18-month period preceding this
Offering, and in light of several automobile manufacturers' approvals of public
company ownership of their respective dealerships during the two-year period
preceding this Offering, the Company believes that these policies will continue
to change as more dealership groups sell their stock to the public, and as the
established, publicly-owned dealership groups acquire additional dealerships. To
the extent that new or amended manufacturer policies further restrict the number
of dealerships which may be owned by a dealership group or the transferability
of the Company's common stock, such policies could have a material adverse
effect on the Company. See "Risk Factors -- Dependence on Automobile
Manufacturers," "Risk Factors -- Manufacturers' Restrictions on the Merger, the
Acquisitions and Future Acquisitions," "Risk Factors -- Stock Ownership/Issuance
Limits; Limitation on Ability to Issue Additional Equity" and "Risk
Factors -- Anti-Takeover Provisions."

As of the date of this Prospectus, GM, Chrysler and Nissan have verbally
informed the Company that they anticipate approving the Merger, the Acquisitions
and this Offering and the proposed acquisitions of GM, Chrysler and Nissan
dealerships, as applicable, pursuant to the Acquisitions and the Merger. The
final approvals of GM, Chrysler and Nissan are subject to the completion of this
Offering. In addition, the final approvals of Nissan and GM are subject to the
execution of the Nissan Public Ownership Addendum, an Agreement between the
Company and Nissan Motor Corporation USA, and a Supplemental Agreement to

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the General Motors Corporation Dealer Sales and Service Agreement. Ford has
provided to the Company preliminary approval of the Company's proposed Merger,
Acquisitions and this Offering. The Company has executed the Ford Master Public
Agreement, which sets forth the ownership limitations that Ford will impose on
the Company (as described below) and new Franchise Agreements for each of the
proposed acquisitions of Ford and/or Mercury dealerships. These agreements and
Ford's final approval of the Merger, Acquisitions and this Offering are subject
to the Company's completion of this Offering. The material terms of the Ford
Master Public Agreement include the following: (a) each of the Company's Ford
and Mercury dealerships must be maintained as separate corporations which must
be adequately capitalized; (b) each of the Company's Ford and Mercury
dealerships must have an Executive Manager with complete day-to-day management
control and with full managerial authority and accountability for the operations
of each dealership in accordance with the Ford Franchise Agreement and the Ford
Master Public Agreement; (c) each of the Company's Ford and Mercury dealerships
will be subject to certain performance criteria established by Ford in such
areas as CSI and market penetration; (d) the Company's ownership of Ford and
Mercury dealerships is specifically limited by guidelines set forth by Ford (as
described below) during the Company's first 12 months as a public company and
thereafter; (e) any material changes in ownership of any dealership and of the
Company are subject to Ford's review and approval under certain circumstances;
(f) each of the Company's Ford and Mercury dealerships must be an exclusive Ford
and/or Mercury dealership and cannot be paired with a dealership of another
brand; (g) a limitation on the cross-collateral of each Ford dealership's
assets; and (h) Ford maintains site control in certain instances over the
location of the Company's Ford and Mercury dealerships.

Ford's present public company policy, which Ford has indicated will apply
to the Company upon the consummation of the Offering, requires public companies
to deliver to Ford all Commission filings made by the public company or
third-parties with respect to the public company, including Schedules 13D and
13G. If any such filing shows that (a) any person or entity would acquire 50% or
more of the public company's voting securities, (b) any person or entity that
owns or controls 50% or more of the Company's voting securities (or other
securities convertible into such voting securities) intends or may intend to
acquire additional voting securities of the public company, (c) an extraordinary
corporate transaction, such as a merger or liquidation, involving the public
company or any of its subsidiaries is anticipated, (d) a material asset sale
involving the public company or any of its subsidiaries is anticipated, (e) a
change in the public company's Board of Directors or management is planned or
has occurred, or (f) any other material change in the public company's business
or corporate structure is planned or has occurred, then the public company must
give Ford notice of such event. If Ford reasonably determines that such an event
would have a material adverse effect on its reputation in the marketplace or is
otherwise not in its interest, Ford's policy may require the public company to
sell or resign from one or more of its Ford franchises. Should the public
company or any of its Ford franchisee subsidiaries enter into an agreement to
transfer the assets of a Ford franchisee subsidiary to a third party, the right
of first refusal described in the Ford Franchise Agreement may apply.

The following sets forth some additional provisions of Ford's present
announced public company policy, which Ford has indicated will apply to the
Company upon the consummation of the Offering: (a) each dealership must be owned
by a separate company that meets Ford's capitalization guidelines; (b) the
day-to-day management control is to be delegated to the General Manager of each
dealership, whose appointment is subject to Ford's prior written approval; (c)
certain compensation plans must be implemented at each dealership; (d) each
dealership must meet reasonable performance criteria; (e) should a dealership
fail to maintain for a twelve month period substantially the same level of CSI
as the CSI reported for that dealership as of the date of its acquisition, the
parent company shall not apply for another Ford authorized dealership until such
time as the CSI level is restored to Ford's reasonable satisfaction; (f) the
parent company may not acquire more than two Ford and two Lincoln Mercury
dealerships within any single twelve month period; (g) unless otherwise agreed
by Ford, the parent company shall not apply for a Ford authorized dealership if,
once owning such dealership, the parent company would own or control the lesser
of (i) 15 Ford and 15 Lincoln Mercury Dealerships or (ii) that number of Ford
authorized dealerships with total retail sales in the preceding calendar year of
more than 2% of the total Ford and Lincoln Mercury branded vehicles sold at
retail in the United States; (h) in no event, however, shall the parent company
apply for a Ford authorized dealership in any market area that would result in
the parent company owning or controlling more than one

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Ford authorized dealership in those market areas having three or less such
dealerships or with the parent company owning or controlling more than 25% of
the Ford authorized dealerships in market areas have four or more such
dealerships; (i) the preceding limitations shall apply separately to Ford and
Lincoln Mercury dealerships; (j) should the preceding limits be reached, Ford
will consider extending the limitations; and (k) each dealership shall operate
as an exclusive fully-dedicated Ford and/or Mercury and/or Lincoln dealership.
In addition, Ford's approval will be required for any ownership changes of any
dealership owned or to be acquired by the Company.

In addition to these general policies, Ford has specifically indicated to
the Company that as a condition to Ford's approval of the Offering, the Merger
and the Acquisitions, Ford will require the Company to relocate its existing
Duluth, Georgia Ford dealership and potentially construct a new Ford dealership
facility at the new Duluth location. The Company expects the costs of such
relocation to be approximately $3 million to $4 million, plus any costs of
terminating the existing lease for the land on which the Duluth dealership is
located. Ford has also indicated that said Duluth dealership will operate
pursuant to a "Term Agreement" for a period of no less than 24 months. Such a
"Term Agreement" allows Ford to terminate the Company's Duluth Ford Franchise
Agreement at the end of said 24-month term if the Company's Duluth Ford
dealership does not meet certain sales quotas, market penetration and CSI
performance goals.

Under the general terms of GM's public company agreement, which have been
proposed to the Company, the public company must deliver to GM copies of all
Schedules 13D and 13G, and all amendments thereto and terminations thereof,
received by the public company, within five days of receipt of such Schedules.
If the public company is aware of any ownership of its stock that should have
been reported to it on Schedule 13D but that is not reported in a timely manner,
it will promptly give GM written notice of such ownership, with any relevant
information about the owner that the public company possesses.

The general terms of GM's public company agreement proposed to the Company
further provide that if the public company, through its Board of Directors or
through shareholder action, proposes or if any person, entity or group sends the
public company a Schedule 13D, or any amendments thereto, disclosing (a) an
agreement to acquire or the acquisition of aggregate ownership of more than 20%
of the voting stock of the public company and (b) the public company, through
its Board of Directors or through shareholder action, proposes or if any plans
or proposals which relate to or would result in the following: (i) the
acquisition by any person of more than 20% of the voting stock of the public
company other than for the purposes of ordinary passive investment; (ii) an
extraordinary corporate transaction, such as a material merger, reorganization
or liquidation, involving the public company or a sale or transfer of a material
amount of assets of the public company and its subsidiaries; (iii) any change
which, together with any changes made to the Board of Directors within the
preceding year, would result in a change in control of the then current Board of
the public company; or (iv) in the case of an entity that produces motor
vehicles or controls or is controlled by or is under common control with an
entity that either produces motor vehicles or is a motor vehicle franchisor, the
acquisition by any person, entity or group of more than 20% of the voting stock
of the public company and any proposal by any such person, entity or group,
through the public company Board of Directors or shareholders action, to change
the Board of Directors of the public company, then, if such actions in GM's
business judgment could have a material or adverse effect on its image or
reputation in the GM dealerships operated by the public company or be materially
incompatible with GM's interests (and upon notice of GM's reasons for such
judgment), the public company may be required to take one of the remedial
actions set forth in the next paragraph within a specified time period of
receiving such Schedule 13D or such amendment.

If the Company is obligated under GM's public company policy to take
remedial action, it may be required to transfer the dealership to GM or its
designee. Alternatively, GM or its designee may acquire the assets, properties
or business associated with any GM dealership operated by the public company at
fair market value as determined in accordance with GM's Dealership Agreement
with the public company, or provide evidence to GM that such person, entity or
group no longer has such threshold level of ownership interest in the public
company.

Should the Company or its GM franchisee subsidiary enter into an agreement
to transfer the assets of the GM franchisee subsidiary to a third party under
the proposed terms of the GM public company agreement, the right of first
refusal described in the GM Dealer Agreement may apply to any such transfer.

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The following sets forth some additional provisions of GM's proposed
agreement on public company ownership: (a) under the agreement each GM
dealership will be owned by a separate public company that meets GM net working
capital standards; (b) each public company will comply with GM's brand strategy
and will participate in the dealer marketing groups for its GM lines and non-GM
automotive operations will not be jointly advertised with GM operations; (c)
each public company will have complete dealership operations (sales, service,
parts, used car), and will comply with the channel strategy including divisional
alignment, locations and image requirements; (d) the dealerships will be
exclusive so that no GM sales, service or parts operations will be combined with
non-GM representation and each dealer company will relocate any non-GM lines
within one year of acquiring the dealership; (e) if a public company acquires a
dealership which is not on channel, it will bring it into compliance within 12
months, or GM may require that off-channel GM representation be discontinued in
exchange for compensation based upon an agreed upon formula; (f) GM generally
limits the number of acquisitions a single public company may consummate, and
each acquisition must be submitted to GM for prior approval; (g) there will be
an Executive Manager for each GM dealership who meets the GM requirements for a
dealer operator, except the 15% ownership requirement, and any change in the
Executive Manager must be approved by GM; (h) the public company will comply
with GM's multiple dealer investor/multiple dealer operator policies and will
not acquire more than 50% of the GM dealerships for any division (Chevrolet,
Pontiac-GMC, Oldsmobile, Buick, Cadillac) within a multiple dealer area, and in
the event a multiple dealer area has one dealer in an area that has multiple
dealers for other divisions, the public company may acquire that one dealership
as long as the total does not exceed 50% of the GM dealerships; (i)
semi-annually, GM, the public company and each dealer company will review the
dealer company's performance for sales performance, CSI and branding, and if for
two consecutive evaluation periods the dealer company is not meeting its
requirements, GM can request a change in management within six months; (j) GM
has a right of first refusal if the assets of a dealer company are to be
transferred to a third party; (k) if a dealer agreement is terminated, if
dealership operations are discontinued, if the public company discontinues GM
representation in a multiple dealer area, or if dealership assets are
transferred to GM under the remedial provisions, then GM has the right to
purchase the dealership facilities or assume the leases for the facilities, and
GM will also receive the right of quiet possession for the facilities for 10
years if this right is exercised within 10 years of the Dealer Agreement; and
(l) the public company must agree to use the GM dispute resolution process as
the exclusive source of resolution of any dispute regarding the Dealer
Agreement, the Public Ownership Agreement or acquisition of additional GM
dealerships.

Toyota's general public ownership policy provides that Toyota has the right
to approve any ownership or voting rights of the Company of 20% or greater by
any individual or entity. In addition, no single entity shall hold an ownership
interest, directly or through an affiliate, in more than: (a) the greater of one
dealership or 20% of the Toyota dealer count in a "Metro" market; (b) the lesser
of five dealerships or 5% of the Toyota dealerships in any "Toyota Region;" and
(c) seven Toyota dealerships nationally. Additional provisions of Toyota's
general public ownership policy provide: an entity may not acquire any
additional Toyota dealership within nine months of its prior acquisition of a
Toyota dealership; the public company shall not own contiguous dealerships with
common boundaries; the public company shall create a separate legal entity for
each Toyota dealership which it owns; and the public company shall provide
Toyota with copies of all information and materials filed with the Commission.

It is the current policy of Honda to restrict any company from holding more
than seven Honda or more than three Acura franchises nationally and to restrict
the number of franchises to: (a) one Honda dealership in a "Metro" market (a
metropolitan market represented by two or more Honda dealers) with two to 10
Honda dealership points; (b) two Honda dealerships in a Metro market with 11 to
20 Honda dealership points; (c) three Honda dealerships in a Metro market with
21 or more Honda dealership points; (d) no more than 4% of the Honda dealerships
in any one of the 10 Honda geographic zones; (e) one Acura dealership in a Metro
market (a metropolitan market with two or more Acura dealership points); and (f)
two Acura dealerships in any one of the six Acura geographic zones. Honda has
set forth additional restrictions in its Policy on the Public Ownership of Honda
and Acura Dealerships, including, without limitation (i) the percentage of
public ownership must be restricted so that a controlling interest of the
dealership remains in the hands of approved individuals; (ii) in no event may
the percentage of public ownership of a dealership be greater than or equal to
the percentage of private ownership by American Honda-approved individuals and

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privately-held entities; and (iii) the dealership must provide a separate,
freestanding facility that offers exclusively Honda products and services or
Acura products and services and does not offer competing products or services
from its premises.

While Chrysler evaluates each acquisition or appointment on an individual
basis, it has a published policy regarding multiple dealer ownership which
provides that no person or entity may hold an ownership interest in more than 10
Chrysler Motors dealerships in the United States, six dealerships in the same
sales zone, and two dealerships in the same market, but in no event two like
vehicle line makes in the same market. Any exception to this policy requires
Chrysler approval. Chrysler has not finalized its agreement with the Company as
of this date. The Company is not aware of any general policy restrictions that
have been announced by Chrysler other than the ownership limitations described
herein.

Mazda's public ownership policy as set forth in the Mazda Motor of America,
Inc. d/b/a Mazda North American Operations Dealer Development/Market
Representation Guidelines, Policies and Procedures provides that an entity may
not own dealerships in contiguous markets; however, an entity may own two
dealerships in one metro market. Additional restrictions include, without
limitation, (i) each dealership must have a "stand alone" entity; and (ii) each
dealership entity must have a majority owner holding 51% of the voting stock.

Nissan's public ownership policy as set forth in the proposed Agreement
Between Nissan Motor Corporation in U.S.A. and Sunbelt Automotive Group, Inc.
provides that: (i) no individual or entity may have an ownership or management
interest, direct or indirect, in dealers whose primary marketing areas (PMA's)
competitive segment registration count comprises more than 5% of Nissan's or
Infiniti's total, national competitive segment registrations based on the sum of
retail competitive segment registrations contained in all PMAs associated with
the dealers; (ii) no individual or entity may hold ownership or management,
direct or indirect, in dealers whose PMA's competitive segment registration
count comprises more than 20% of any Nissan or Infiniti regions total
competitive segment registrations contained in all PMA's associated with dealers
in that region; (iii) in order for any entity to acquire additional Nissan or
Infiniti dealerships, the Nissan or Infiniti dealerships which it owns or
controls, directly or indirectly must: (a) be in full compliance with all the
terms of its respective Dealer Agreements; (b) meet, in all material respects,
all of the applicable Nissan or Infiniti market representation and other
standards and policies; and (c) with respect to the Nissan Division and Region
at issue, the Nissan or Infiniti dealerships which the entity owns or controls
must, in the aggregate and with respect to at least 50% of those individual
dealerships, have performed at or above all performance levels set forth in the
business plans for those dealerships over the proceeding 12 month period; and
(iv) if the proposed acquisition of any Nissan or Infiniti dealership would
cause an individual or entity to exceed the ownership policy, Nissan will reject
a dealer's application for approval of such ownership transfer until such time
as the purchasing individual or entity shall be able to complete the acquisition
within the requirements of that policy. Notwithstanding the foregoing, Nissan
may withhold consent to a proposed acquisition, even if that acquisition
satisfies the parameters of the ownership policy, based on the grounds set forth
in the Nissan Dealer Agreement and applicable state law.

Additional restrictions include, without limitation, (i) if any person or
entity acquires more than 20% of Sunbelt's common stock issued and outstanding
at any time and Nissan determines that such person or entity does not have
interests compatible with those of Nissan, or is otherwise not qualified to have
an ownership interest in a Nissan dealership, Sunbelt must terminate its dealer
agreements with Nissan or transfer the Nissan dealerships to a third party
acceptable to Nissan unless, within 90 days after Nissan's determination, such
person's or entity's ownership interest is reduced to less than 20%; (ii)
Sunbelt shall create and maintain separate legal entities for each Nissan and
Infiniti dealership that it owns, directly or indirectly; and (iii) Sunbelt
shall obtain a separate motor vehicle dealer license for each dealership and
shall maintain separate financial statements for each such dealerships.

Saturn has generally not approved the public ownership of its dealership
franchises. Although the Company recently requested Saturn's approval, the
Company expects to divest the Jay Automotive Group Saturn dealership in
Columbus, Georgia. For this reason, the financial results of the Company's
Saturn dealership in Columbus, Georgia have not been included in this
Prospectus. If Saturn does not approve the

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Company's ownership of the Saturn dealership in Columbus, Georgia, the Company
will sell the Saturn dealership.

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

Saturn has not been included in the table above because the Company expects
to divest the Jay Automotive Group Saturn dealership after the consummation of
the Offering, the Merger and the Acquisitions.

In addition to the ownership limitations described herein, manufacturers
generally require that the Executive Manager of each of the dealerships that the
Company owns or expects to acquire upon consummation of the Offering have
authority to manage the day-to-day operations of their respective dealership,
particularly as such operations relate to the applicable manufacturers. The
Company expects its Executive Managers to have the authority required by each
manufacturer.

Certain state statutes, including Georgia's, limit manufacturers' control
over dealerships. Georgia law provides that no manufacturer may arbitrarily
reject a proposed change of control or sale of an automobile

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dealership, and any manufacturer challenging such a transfer of a dealership
must provide written reasons for its rejection to the dealer. Manufacturers bear
the burden of proof to show that any disapproval of a proposed transfer of a
dealership is not arbitrary. If a manufacturer terminates a franchise agreement
due to a proposed transfer of the dealership or for any other reason not
considered to constitute good cause under Georgia law, such termination will be
ineffective. As an alternative to rejecting or accepting a proposed transfer of
a dealership or terminating the franchise agreement, Georgia law provides that a
manufacturer may offer to purchase the dealership on the same terms and
conditions offered to the prospective transferee.

Under Tennessee law, a manufacturer may be denied a Tennessee license, or
have an existing license revoked or suspended, if the manufacturer unfairly, or
without due regard to the equities or without just provocation cancels or fails
to renew a franchise agreement of a dealer. A manufacturer's Tennessee license
may also be revoked if the manufacturer prevents or attempts to prevent the sale
or transfer of the dealership by unreasonably withholding consent to the
transfer.

Under North Carolina law, notwithstanding the terms of any franchise
agreement between the manufacturer and the dealer, the manufacturer may not
prevent or refuse to approve: (i) the sale or transfer of the ownership of the
dealer by the sale of the business, stock transfer, or otherwise; (ii) the
transfer, sale or assignment of a dealer franchise; (iii) a change in the
executive management or principal operator of the dealership; or (iv) the
relocation of the dealership to another site within the dealer's relevant market
area, unless the manufacturer can show that the proposed transfer, sale,
assignment, relocation or change is unreasonable. In addition, under North
Carolina law, dealerships may challenge manufacturer's attempts to establish new
dealerships in or to relocate dealerships into the dealer's relevant market
area, and state regulators can prevent the proposed establishment or relocation
upon a finding that there is good cause for not permitting such addition or
relocation. North Carolina law limits the ability of a manufacturer to
terminate, cancel or fail to renew a franchise unless there is good cause for
such termination, cancellation or renewal and the manufacturer acted in good
faith.

COMPETITION

The automotive retailing industry in which the Company will operate is
highly competitive. The industry is fragmented and characterized by a large
number of independent operators, many of whom are individuals, families and
small groups. In the sale of new vehicles, the Company will principally compete
with other new automotive dealers in the same general vicinity of the locations
of the dealerships that the Company owns or expects to acquire upon consummation
of the Offering. Such competing dealerships may offer the same or different
models and makes of vehicles that the Company will sell. In the sale of used
vehicles, the Company will principally compete with other used automobile
dealers and with new automobile dealers that operate used automobile lots in the
same general vicinity of the Company's dealership locations. In each of its
markets, the Company will compete with numerous other new automobile dealers
selling other brands and a large number of other used automobile stores. In
addition, certain regional and national car rental companies operate retail used
car lots to dispose of their used rental cars. See "Risk
Factors -- Competition."

The Company also may face increased competition from certain used
automobile "superstores," such as CarMax, AutoNation USA and Driver's Mart
Worldwide Inc. Such used automobile superstores have emerged recently in various
areas of the United States and are beginning to expand nationally. Such
"superstores" have recently opened in certain markets in which dealerships that
the Company owns or expects to acquire upon consummation of the Offering
compete. In addition, the Company will compete with independent leasing
companies, and, to a lesser extent, with an increasing number of automobile
dealers that sell vehicles through nontraditional methods, such as through
direct mail, the Internet or warehouse clubs.

The Company believes that the principal competitive factors in vehicle
sales are the marketing campaigns conducted by manufacturers, the ability of
dealerships to offer a wide selection of the most popular vehicles, the location
of dealerships and the quality of customer service. In "main street" markets,
the Company believes that competition tends to be interbrand rather than
intrabrand. This has the effect of eliminating brand saturation within a given
market. Other competitive factors include customer preference for particular
brands of automobiles, pricing (including manufacturer rebates and other special
offers) and warranties. The

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Company believes that its dealerships are competitive in all of these areas.
However, as it enters other markets, the Company may face competitors that are
more established or have access to greater financial resources. The Company,
however, will not have any cost advantage in purchasing new vehicles from
manufacturers and expects to typically rely on advertising and merchandising,
sales expertise, service reputation and location of its dealerships to sell new
vehicles.

The Company will compete against other franchised dealers to perform
warranty repairs and against other automobile dealers, franchised and
independent service center chains and independent garages for customer-paid
repair and routine maintenance business. The Company will compete with other
automobile dealers, service stores and auto parts retailers in its parts
operations. The Company believes that the principal competitive factors in parts
and service sales are price, the use of factory-approved replacement parts, the
familiarity with a manufacturer's brands and models and the quality of customer
service. A number of regional or national chains offer selected parts and
services at prices that may be lower than the prices the Company expects to
offer.

GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL MATTERS

A number of regulations affect the Company's prospective business of
marketing, selling, financing and servicing automobiles. The Company also is
subject to laws and regulations relating to business corporations generally.
Under North Carolina, Tennessee, and Georgia law, as well as the laws of other
states into which the Company may expand, the Company must obtain a license in
order to establish, operate or relocate a dealership or operate an automotive
repair service. Under Florida law, the Company must also obtain applicable
insurance and financing-related licenses in order to operate its sub-prime
finance business. These laws also regulate the Company's conduct of business,
including its advertising and sales practices. Other states may have similar
requirements.

The Company's prospective operations are also subject to laws governing
consumer protection. Automobile dealers and manufacturers are subject to
so-called "Lemon Laws" that require a manufacturer or the dealer to replace a
new vehicle or accept it for a full refund within one year after initial
purchase if the vehicle does not conform to the manufacturer's express
warranties and the dealer or manufacturer, after a reasonable number of
attempts, is unable to correct or repair the defect. Federal laws require
certain written disclosures to be provided on new vehicles, including mileage
and pricing information.

The Company's financing activities with its customers are subject to
federal truth-in-lending, consumer leasing and equal credit opportunity
regulations as well as state and local motor vehicle finance laws, installment
finance laws, usury laws and other installment sales laws. Some states regulate
finance fees that may be paid as a result of vehicle sales. State and federal
environmental regulations, including regulations governing air and water quality
and the storage and disposal of gasoline, oil and other materials, also apply to
the Company.

The Company believes that it complies in all material respects with the
laws affecting its business. Possible penalties for violation of any of these
laws include revocation of the Company's prospective licenses and fines. In
addition, many laws may give customers a private cause of action.

As with automotive dealerships generally, and service, parts and body shop
operations in particular, the Company's prospective business involves the use,
storage, handling and contracting for recycling or disposal of hazardous or
toxic substances or wastes, including environmentally sensitive materials such
as motor oil, waste motor oil and filters, transmission fluid, antifreeze,
Freon, waste paint and lacquer thinner, batteries, solvents, lubricants,
degreasing agents, gasoline and diesel fuels. The Company's prospective business
also involves the past and current operation and/or removal of aboveground and
underground storage tanks containing such substances or wastes. Accordingly, the
Company is subject to regulation by federal, state and local authorities
establishing health and environmental quality standards, and liability related
thereto, and providing penalties for violations of those standards. The Company
is also subject to laws, ordinances and regulations governing remediation of
contamination at facilities it operates or to which it sends hazardous or toxic
substances or wastes for treatment, recycling or disposal. The Company believes
that it does not have any material environmental liabilities and that compliance
with environmental laws and regulations will not, individually or in the
aggregate, have a material adverse effect on the Company's results of operations
or financial condition. Furthermore, environmental laws and regulations are
complex and subject to frequent change. There can be

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no assurance that compliance with amended, new or more stringent laws or
regulations, stricter interpretations of existing laws or the future discovery
of environmental conditions will not require additional expenditures by the
Company, or that such expenditures will not be material. See "Risk
Factors -- Adverse Effect of Governmental Regulation; Environmental Regulation
Compliance Costs."

FACILITIES

The Company's principal executive offices are located at 5901
Peachtree-Dunwoody Rd., Suite 250-B, Atlanta, Georgia 30328, and its telephone
number is (678) 443-8100. The following table identifies, for each of the
properties to be utilized by the Company's operations and the dealerships that
the Company owns or expects to acquire upon consummation of the Offering, the
location, use and expiration date of the Company's lease for such property:

LEASE/ EXPIRATION
BUSINESS UNIT OWN LOCATION USE DATE
- ------------- ------ -------- --- ----------

Robertson Oldsmobile-Cadillac, Lease 2355 Browns Bridge Road New and used vehicle 2005
Inc......................... Gainesville, GA sales; service; F&I
Grindstaff, Inc............... Lease 2224 West Elk Avenue New vehicle sales; 2001
Elizabethton, TN service; F&I
Hones, Inc. d/b/a/ Bill Holt Lease 4910 Sylva Highway New and used vehicle 2016
Ford Mercury................ Franklin, NC sales; service; F&I
Day's Chevrolet, Inc.......... Lease 4461 S. Main St. New and used vehicle 2008
Acworth, GA sales; service; F&I
Wade Ford, Inc................ Lease 3860 South Cobb Drive New and used vehicle 2008
Smyrna, GA sale; service; F&I
Lease 3860 South Cobb Drive Fleet sales; vehicle 2005
Smyrna, GA storage
Wade Ford Buford, Inc......... Lease 4525 Highway 20 New and used vehicle Month-to-Month
Buford, GA sales; service; F&I
South Financial Corporation... Lease 3500 Blanding Blvd. Consumer Lending 2003
Jacksonville, FL Administration
Jay Automotive Group, Inc..... Lease 1661 Whittlesey Road New and used vehicle 2017
Columbus, GA sales; service; F&I
Lease Veterans Parkway New and used vehicle 2003
Columbus, GA sales; service; F&I
Lease 1801 Box Road Used vehicle sales; 1999
Columbus, GA F&I
Boomershine Automotive Group, Lease 2150 Cobb Parkway New and used vehicle 1999
Inc......................... Smyrna, GA sales; service; F&I
Lease 3280 Commerce Ave. New and used vehicle 2003
Duluth, GA sales; service; F&I
Lease 3230 Satellite Blvd. New and used vehicle 2017
Duluth, GA sales; service; F&I
Lease 595 East Main St. New and used vehicle 2006
Cartersville, GA sales; service; F&I
Lease 964 Barrett Parkway New and used vehicle 2000
Kennesaw, GA sales; service; F&I
Lease 2150 Cobb Parkway New and used vehicle 2006
Smyrna, GA (Hummer) sales; service; F&I
Collision Centers USA......... Lease 5548 Old Dixie Highway Collision Center 2009
Forest Park, GA
Lease 1715 Cobb Parkway Collision Center 2003
Marietta, GA
Lease 1110 Highway 155 South Collision Center 2012
McDonough, GA
Lease 2970 Old Norcross Rd. Collision Center 2016
Duluth, GA 30096
Sunbelt Automotive Group,
Inc......................... Lease 5901 Peachtree-Dunwoody Rd. Corporate 1999
Atlanta, GA Administration

All of the properties utilized by the Company's operations and the
dealerships that the Company owns or expects to acquire upon consummation of the
Offering are leased as set forth in the foregoing table. The Company believes
that these facilities are adequate for its current needs. In connection with its
acquisition strategy, the Company intends to lease the real estate associated
with a particular business unit whenever practicable. Under the terms of its
Franchise Agreements, the Company must maintain an appropriate

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appearance and design of its facilities and is restricted in its ability to
relocate its dealerships. See "-- Relationships with Manufacturers."

EMPLOYEES

As of March 31, 1998, pro forma for the Merger and the Acquisitions, the
Company and dealerships that the Company owns or expects to acquire upon
consummation of the Offering employed 1,148 people, of whom approximately 177
were employed in managerial positions, 347 were employed in non-managerial sales
positions, 386 were employed in non-managerial parts and service positions and
238 were employed in administrative support positions.

The following table sets forth information regarding the number of
employees employed by Sunbelt and the dealerships that the Company owns or
expects to acquire upon consummation of the Offering, pro forma for the Merger
and the Acquisition, as of March 31, 1998:

PERCENT
BUSINESS UNIT EMPLOYEES OF SUNBELT
- ------------- --------- ----------

Boomershine Automotive Group, Inc........................... 478 41.6%
Day's Chevrolet, Inc........................................ 89 7.8
Grindstaff, Inc............................................. 135 11.8
Hones, Inc.................................................. 36 3.1
Jay Automotive Group, Inc................................... 178 15.5
Robertson Oldsmobile-Cadillac, Inc.......................... 35 3.0
Sunbelt Automotive Group, Inc. (Corporate).................. 11 1.0
Wade Ford, Inc. and Wade Ford Buford, Inc................... 186 16.2
----- ------
1,148 100.0%
===== ======

The Company believes that many dealerships in the automotive retailing
industry have had difficulty in attracting and retaining qualified personnel for
a number of reasons, including the historical inability of dealerships to
provide employees with a liquid equity interest in the profitability of the
dealerships. The Company intends, upon completion of the Offering, to provide
certain executive officers, managers and other employees with stock options and
all employees with a stock purchase plan and believes those types of equity
incentives will be attractive to existing and prospective employees of the
Company. See "Management -- Incentive Stock Plan" and "Risk
Factors -- Dependence on Key Personnel and Limited Management and Personnel
Resources."

The Company believes that its relationship with its employees is good. None
of the Company's employees or the employees of the dealerships that the Company
owns or expects to acquire upon consummation of the Offering is represented by a
labor union. Because of its dependence on the manufacturers, however, the
Company may be affected by labor strikes, work slowdowns and walkouts at the
manufacturers' manufacturing facilities. See "Risk Factors -- Dependence on
Automobile Manufacturers," "Risk Factors -- Strikes and Labor Actions; GM
Strike" and "Business -- Cyclicality."

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LEGAL PROCEEDINGS AND INSURANCE

From time to time, the Company and the dealerships that the Company owns or
expects to acquire upon consummation of the Offering have been or may be named
in claims involving the manufacture, servicing and/or repair of automobiles,
contractual disputes and other matters arising in the ordinary course of the
Company's business. Currently, no legal proceedings are pending against or
involve the Company or the dealerships that the Company owns or expects to
acquire upon consummation of the Offering that, in the opinion of management,
could reasonably be expected to have a material adverse effect on the business,
financial condition or results of operations of the Company. Because of their
vehicle inventory and nature of business, automotive dealerships generally
require significant levels of insurance covering a broad variety of risks. The
Company's insurance includes an umbrella policy as well as insurance on its
buildings, comprehensive coverage for its vehicle inventory, general liability
insurance, employee dishonesty coverage and errors and omissions insurance in
connection with its vehicle sales and financing activities.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS; KEY PERSONNEL

The executive officers and Directors of the Company and certain key
employees of the Company are as follows:

NAME AGE POSITION(S) WITH THE COMPANY
- ---- --- ----------------------------

Walter M. Boomershine, Jr.*.... 69 Chairman of the Board and Senior Vice President
Robert W. Gundeck*............. 55 Chief Executive Officer and Director
Charles K. Yancey*............. 59 President, Chief Operating Officer and Director
Stephen C. Whicker*............ 49 Executive Vice President of Corporate Development; General
Counsel, Secretary and Director
Ricky L. Brown*................ 45 Chief Financial Officer, Vice President of Finance and
Treasurer
Alan K. Arnold................. 42 Vice President of Ford Division and Director
George D. Busbee............... 70 Director
Lee M. Sessions, Jr. .......... 51 Director
Jack R. Altherr................ 72 Director
R. Glynn Wimberly.............. 47 Chief Executive Officer, South Financial Corporation

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

* Executive Officer

WALTER M. BOOMERSHINE, JR. has been Chairman of the Board and President of
the Company since December 1997, and will continue to serve as Chairman of the
Board and Senior Vice President following the Offering. Prior to the Merger, Mr.
Boomershine was the Chairman of the Board, President and the controlling
shareholder of Boomershine Automotive. Mr. Boomershine became associated with
Boomershine Automotive in 1953 and has served in various capacities as an
employee and officer since that date. Mr. Boomershine received a Bachelor of
Science degree in industrial management from the Georgia Institute of Technology
in 1951 and received a certificate for completing the program for Management
Development at Harvard University's Graduate School of Business Administration
in 1973. Mr. Boomershine's initial term as a director of the Company will expire
at the annual meeting of the shareholders of the Company to be held in 2000.

ROBERT W. GUNDECK has been the Chief Executive Officer of the Company since
April 1998 and will continue to serve in that capacity following the Offering.
Upon the consummation of the Offering, Mr. Gundeck will also become a director
of the Company. During the five year period preceding the Offering, Mr. Gundeck
was employed by American Business Products, Inc., a publicly traded corporation,
as Chief Executive Officer and President from 1995 to 1998, Chief Operating
Officer and President from 1992 to 1995 and Vice President of Corporate
Development from 1988 to 1992. Mr. Gundeck received a Bachelor of Science degree
from Rollins College in 1965 and a Masters of Business Administration degree in
Marketing and Finance from American University in 1968. Mr. Gundeck's initial
term as a director of the Company will expire at the annual meeting of the
shareholders of the Company to be held in 2000.

CHARLES K. YANCEY served as interim Chief Executive Officer and director of
the Company from December 1997 through March 1998, and will serve as the
President, Chief Operating Officer and director of the Company following the
Offering. During the five year period preceding the Merger, Mr. Yancey served as
Chief Executive Officer, Secretary and a director of Boomershine Automotive. Mr.
Yancey received a Masters in Business Administration degree in Finance and
Accounting and a Bachelor of Arts degree in Accounting from Georgia State
University in 1970 and 1968, respectively. Mr. Yancey also has been licensed as
a certified public accountant by the State of Georgia. Mr. Yancey's initial term
as a director of the Company will expire at the annual meeting of the
shareholders of the Company to be held in 2001.

STEPHEN C. WHICKER has been Executive Vice President of Corporate
Development, General Counsel, Secretary and director of the Company since
December 1997. During the five-year period prior to

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the Offering, Mr. Whicker was a principal of The Whicker Law Firm, a private law
practice in Atlanta, Georgia. Mr. Whicker received a Bachelor of Science degree
in Business Administration from the University of North Carolina in 1971 and a
Juris Doctor degree from Samford University in 1974. Mr. Whicker's initial term
as a director of the Company will expire at the annual meeting of the
shareholders of the Company to be held in 2001.

RICKY L. BROWN has been Chief Financial Officer, Vice President of Finance
and Treasurer of the Company since December 1997. Prior to the Merger, Mr. Brown
served as Controller and Chief Financial Officer of Boomershine Automotive from
1996 to 1998, as Chief Financial Officer of Peachtree Nissan, Inc. (f/k/a
Hickman Nissan, Inc.) from 1990 to 1996 and as Chief Financial Officer and
part-owner of Peachtree Acceptance Corporation from 1990 to 1996. Mr. Brown
received an Associate of Applied Science degree from Gadsden State College in
1973, and a Bachelor of Science degree in Accounting from Jacksonville State
University in 1975. Mr. Brown also has been licensed as a certified public
accountant by the State of Alabama.

ALAN K. ARNOLD, who is a key employee of the Company, will serve as Vice
President of Ford Division, President of Wade Ford, Inc., Wade Ford Buford,
Inc., Boomershine Ford, Inc. and Franklin Ford/Mercury, Inc., and director of
the Company upon the consummation of the Offering. During the five year period
preceding the Offering, Mr. Arnold was the President and controlling shareholder
of Wade Ford, Inc. and Wade Ford Buford, Inc. Mr. Arnold's initial term as a
director of the Company will expire at the annual meeting of the shareholders of
the Company to be held in 1999.

GEORGE D. BUSBEE will serve as a director of the Company upon the
consummation of the Offering. Mr. Busbee has been of counsel to the law firm of
King & Spalding since January 1993 and was a partner of King & Spalding from
January 1983 to December 1993. Mr. Busbee was Governor of the State of Georgia
from 1975 until 1983. He is currently a director of Union Camp Corporation and
Weeks Corporation and served as a director of Delta Air Lines, Inc. from January
1983 to November 1997. Mr. Busbee received a Bachelor of Arts degree in Business
and a Juris Doctor degree from the University of Georgia in 1949 and 1952,
respectively. Mr. Busbee's initial term as a director of the Company will expire
at the annual meeting of the shareholders of the Company to be held in 2000.

LEE M. SESSIONS, JR. will serve as a director of the Company upon the
consummation of the Offering. Mr. Sessions was the Principal Operating Officer
of Bank South Corporation from August 1991 to March 1996. Currently, Mr.
Sessions is working as a private investor and consultant to various business and
non-profit organizations. Mr. Sessions received a Bachelor of Arts degree in
English/History from Vanderbilt University in 1968 and received a certificate
for completing the program for Management Development at Harvard University's
Graduate School of Business Administration in 1980. Mr. Session's initial term
as a director of the Company will expire at the annual meeting of the
shareholders of the Company to be held in 1999.

JACK R. ALTHERR will serve as a director of the Company upon the
consummation of the Offering. Mr. Altherr served QMS, Inc. (formerly Quality
Micro Systems, Inc.) in various graduating capacities from April 1984 to October
1995, including Chief Operating Officer/Chief Financial Officer, Executive Vice
President of Sales and Marketing and director. Mr. Altherr received a Bachelor
of Science degree in Accounting from Indiana University in 1951. Mr. Altherr
also has been licensed as a certified public accountant by the State of Indiana.
Mr. Altherr's initial term as a director of the Company will expire at the
annual meeting of the shareholders of the Company to be held in 2001.

R. GLYNN WIMBERLY, who is a key employee of the Company, became the Chief
Executive Officer of South Financial Corporation upon the consummation of the
South Financial Acquisition in January of 1998. From August 1992 until January
1998, Mr. Wimberly served as the President and Chief Operating Officer of U.S.
Auto Credit Corp., a sub-prime automotive finance company. Mr. Wimberly has been
employed in various positions in the consumer finance industry for 24 years at
such companies as General Motors Acceptance Corporation, where he worked in
various capacities, including Credit Manager for Hollywood, Florida operations
and World Omni Financial Corporation, where he worked in various capacities,
including Manager of Branch Operations. Mr. Wimberly received a Bachelor of Arts
degree in Business Administration from Valdosta State College in 1973.

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CLASSIFIED BOARD OF DIRECTORS

The Board of Directors of the Company is divided into three classes, each
of which, after a transitional period, will serve for a term of three years,
with one class being elected each year. The executive officers are elected
annually by, and serve at the discretion of, the Company's Board of Directors.
Classification of the Board of Directors increases the time required to change
the composition of a majority of directors and may tend to discourage a takeover
bid for the Company. See "Description of Capital Stock -- Georgia Law, Certain
Articles and Bylaw Provisions and Certain Franchise Payment Provisions."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Since the Company's organization in 1997, all matters concerning executive
officer compensation have been addressed by the entire Board of Directors,
including directors who serve as executive officers of the Company. Upon
consummation of the Offering, Mr. Busbee, Mr. Sessions and Mr. Altherr will
serve on the Company's Compensation Committee.

COMMITTEES OF THE BOARD

The Board of Directors will establish a Finance Committee, a Compensation
Committee and an Audit Committee as soon as practicable after the completion of
the Offering. The Finance Committee will oversee the Company's budgetary process
and the Company's relations with its lenders. The Compensation Committee, all of
whose members will be independent directors, will review and approve
compensation for the executive officers, and administer, and determine awards
under, the Incentive Stock Plan and any other incentive compensation plans for
employees of the Company. See "Management -- Incentive Stock Plan." The Audit
Committee, the majority of whose members will consist of independent directors,
will recommend the selection of auditors for the Company and will review the
results of the audit and other reports and services provided by the Company's
independent auditors. The Company has not previously had any of these
committees.

DIRECTOR COMPENSATION

Members of the Board of Directors who are not employees of the Company will
receive options to purchase 5,000 shares of common stock upon initially joining
the Board of Directors, will be compensated for their services at a rate of
$12,000 per annum plus $1,000 per meeting attended and will be eligible to
participate in the Company's Incentive Stock Plan. The Company will also
reimburse all directors for their expenses incurred in connection with their
activities as directors of the Company. Directors who are also employees of the
Company receive no additional compensation for serving on the Board of
Directors.

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EXECUTIVE COMPENSATION

The Company was incorporated on December 17, 1997 and did not conduct any
operations prior to that time. Neither the Chief Executive Officer, nor any
other executive officer of the Company, received any compensation in 1997 from
the Company.

Set forth below is information for the years ended June 30, 1997, 1996 and
1995 with respect to the executive officers of Boomershine Automotive, as the
predecessor of the Company.

SUMMARY ANNUAL COMPENSATION

ANNUAL COMPENSATION
--------------------------
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS
- ---------------------------- ---- -------- --------

Walter M. Boomershine, Jr.,................................. 1997 $ 49,200 $ --
Chairman and Senior Vice 1996 49,200 680,400
President 1995 49,200 766,931
Charles K. Yancey,.......................................... 1997 $102,033 $ --
President, Chief Operating 1996 102,033 403,297
Officer and Director 1995 102,033 398,466
Ricky L. Brown,............................................. 1997 $ 62,000 $ --
Chief Financial Officer and Controller 1996 -- --
1995 -- --

EXECUTIVE EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with Messrs. Walter M.
Boomershine, Jr., Robert W. Gundeck, Charles K. Yancey, Stephen C. Whicker and
Ricky L. Brown (the "Employment Agreements"), each of which will be effective
upon the effective date of this Offering. The Employment Agreements provide for
an annual base salary, potential fiscal year end bonuses and certain other
benefits. Each Employment Agreement generally provides for a level annual
increase of the base salary throughout the term of the agreement and provides
that any annual bonuses will be based upon certain performance-related
objectives of the Company that will be ultimately established by the
Compensation Committee. Certain terms of the Employment Agreements are
summarized in the table below:

FIRST YEAR
TERM BASE STOCK
EMPLOYEE POSITION/TITLE (YEARS) COMPENSATION OPTIONS(1)
- -------- -------------- ------- ------------ ----------

Walter M. Boomershine,
Jr........................ Chairman and Senior Vice President 3 $200,000 25,000
Robert W. Gundeck........... Chief Executive Officer 5 300,000 350,000
Charles K. Yancey........... Chief Operating Officer and President 5 250,000 540,000
Stephen C. Whicker.......... Executive V.P. of Corporate Development, 5 200,000 540,000
General Counsel and Secretary
Ricky L. Brown.............. Chief Financial Officer, Vice President 5 135,000 120,000
of Finance and Treasurer

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

(1) As of the effective date of this Offering, pursuant to employee's
participation in the Company's Incentive Stock Plan. See
"Management -- Incentive Stock Plan."

Each of the Employment Agreements of Messrs. Gundeck, Whicker and Brown are
for a term of generally five years and may be renewed for terms of one to three
years thereafter. Mr. Boomershine's Employment Agreement provides that he will
serve as Senior Vice President for a term ending December 31, 2000 and as a
consultant to the Company for a term of 10 years thereafter. Mr. Boomershine's
base salary during the consultation period will be $200,000 for the first two
years and $100,000 each year thereafter. Mr. Yancey's Employment Agreement
provides that he will serve as Chief Operating Officer and President of the
Company for a term of five years and as a consultant to the Company for a term
of generally five years thereafter. Mr. Yancey's base salary during said
consultation period will be $50,000 per year.

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107

All of the Employment Agreements provide that the Company may terminate the
executive officer with or without cause. The Employment Agreements provide that
if the Company terminates an executive officer without cause or forces the
executive officer to resign for what is not considered a "Good Reason" pursuant
to the applicable Employment Agreement, the Company must continue to pay the
executive officer's base salary and his annual average bonus for a period of no
less than the remaining term of the applicable Employment Agreement.

Each of the Employment Agreements contains similar confidentiality and
non-competition provisions. These provisions provide that during the term of the
Employment Agreement, during a period of three years after the termination
thereof with respect to confidentiality provisions and during a period of one
year after the termination thereof with respect to non-competition provisions,
the executive officer shall not (i) use or disclose any confidential information
of the Company, (ii) become employed by or obtain any ownership interest in any
competitor of the Company that is located within a territory that is specified
in the applicable Employment Agreement, or (iii) interfere with the Company's
relationships with any of its customers, vendors or employees. Said geographic
restrictions generally apply to territories that are within a 100-mile radius of
the city of Atlanta, Georgia or within a 100-mile radius of any automobile or
truck dealership or ancillary business in which the Company has a controlling
interest.

In addition, each Employment Agreement provides that if there is a "Change
of Control," the executive will receive the following benefits: (1) base salary
for a period of time generally no less than the term of the applicable
Employment Agreement plus consulting compensation for a certain period to the
extent the executive officer's Employment Agreement provides for any
consultation periods; (2) a pro-rata portion of the bonus applicable to the
fiscal year in which the termination occurs plus a bonus payment for the
three-year period thereafter; (3) participation in all employee retirement plans
maintained by the Company as of the date of termination for the three-year
period following the termination, or, if no such plans exist, the Company will
pay to the executive officer the then present value of the excess of (i) the
benefit the executive would have been paid under such plan had the executive
continued to be covered for said three-year period (less required contribution
amount) with assumed earnings of eight percent over (ii) the benefit actually
payable under said plan; and (4) medical, dental and hospitalization insurance
coverage for the executive and the executive's dependents until the date on
which the executive is employed by, and becomes eligible for medical, dental and
hospitalization coverage through the plan of, another employer.

Each Employment Agreement provides that a "Change in Control" shall be
deemed to have occurred if (A) prior to the Offering, the shareholders of the
Company or its affiliates sell or otherwise transfer to persons or entities who
are not affiliates of the Company 75% or more of the voting stock of the Company
or its affiliates; (B) any person becomes a beneficial owner or 50% or more of
the voting stock of the Company or its Affiliates prior to the Offering or 40%
or more of the voting stock of the Company or its Affiliates after the Offering;
(C) the majority of the Board of Directors of the Company consists of
individuals other than directors who are incumbent as of the date of the
applicable Employment Agreement or directors that become directors by a majority
vote of the directors who are incumbent as of said date; (D) all or
substantially all of the assets or business of the Company or its affiliates is
disposed of pursuant to a merger, consolidation or other transaction other than
to an affiliate of the Company (unless the Company's shareholders, immediately
prior to such merger, consolidation or other transaction, beneficially own 50%
or more of the voting stock or other ownership interest of any entity or
entities that succeed to the business of the Company; (E) the consummation of a
merger, consolidation or other business combination of the Company with any
other person or affiliate thereof, other than a merger, consolidation or
business combination which would result in the outstanding common stock of the
Company immediately prior thereto continuing to represent at least 50% of the
outstanding common stock of the Company or such surviving entity or parent or
affiliate thereof immediately after such merger, consolidation or business
combination, or the consummation of a plan of complete liquidation of the
Company; or (F) the occurrence of any other event or circumstance which the
Board of Directors of the Company determines, by resolution, affects the control
of the Company and therefore constitutes a "Change of Control."

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INCENTIVE STOCK PLAN

The Board of Directors of the Company adopted the Company's 1997 & 1998
Incentive Stock Plan (the "Incentive Stock Plan") on December 18, 1997, and said
Incentive Stock Plan was approved by the shareholders of the Company on January
8, 1998, in order to attract and retain key personnel. The following discussion
of the material features of the Incentive Stock Plan is qualified by reference
to the text of such Incentive Stock Plan filed as an exhibit to the Registration
Statement of which this Prospectus is a part.

Under the Incentive Stock Plan, options to purchase up to an aggregate of
2,250,000 shares of common stock of the Company may be granted by the
Compensation Committee to directors, officers, consultants and employees of the
Company and/or any of its subsidiaries and other individuals providing services
to the Company. Members of the Board of Directors who serve on the Compensation
Committee must qualify as "non-employee directors," as that term is defined in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended. In
addition, the Company may issue incentive stock options ("ISOs") to officers and
directors who are employees of the Company.

The Compensation Committee of the Board of Directors of the Company, which
is comprised of independent directors, will administer the Incentive Stock Plan
and will determine, among other things, the persons who are to receive options,
the number of shares to be subject to each option and the vesting schedule of
options. Options granted under the Incentive Stock Plan that are not ISOs must
be granted no later than January 1, 2008 and must be exercised within 10 years
of the grant, but in no event later than December 31, 2017. ISOs must be granted
no later than ten years after the adoption of the Incentive Stock Plan and must
be exercised no later than ten years after the particular ISO is granted.

Options generally may not be transferred other than by will or the laws of
descent and distribution and, during the lifetime of an optionee, options may be
exercised only by the optionee. The exercise price of options that are not ISOs
will be determined at the discretion of the Compensation Committee. The exercise
price of the ISOs may not be less than the market value of the common stock on
the date of grant of the option. In the case of ISOs granted to any holder who
on the date of grant of the ISOs holds more than ten percent of the total
combined voting power of all classes of stock of the Company and its
subsidiaries, the exercise price may not be less than 110% of the market value
per share of the common stock on the date of grant. Unless designated as
"incentive stock options" intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), options granted under the
Incentive Stock Plan are intended to be "nonstatutory stock options" ("NSOs").
The exercise price may be paid in cash, in shares of common stock owned by the
optionee, in other property deemed acceptable by the Compensation Committee, or
in any combination of cash, shares or other such acceptable property.

The Incentive Stock Plan provides that, in the event of changes in the
corporate structure of the Company or certain events affecting the shares of the
Company, adjustments will automatically be made in the number and kind of shares
available for issuance and in the number and kind of shares covered by
outstanding options. It further provides that, in connection with any merger or
consolidation or other business combination in which the Company is not the
surviving corporation, the Compensation Committee shall cause to be paid, in
cash, the excess of the fair market value of all options over the exercise price
of such options on the date of such business combination or, alternatively,
shall grant substitute options on such terms and conditions which substantially
preserve the value, rights and benefits of options being substituted.

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109

The Board of Directors of the Company has granted or will grant
contemporaneously with the closing of this Offering options to purchase an
aggregate of 1,592,000 shares of common stock under the Incentive Stock Plan to
executive officers, other employees and directors of the Company. All of these
options will vest and become exercisable from time to time over the ten-year
period following the date each option is granted in accordance with the terms of
the individual option grants. The following table sets forth the date on which
such grants were made, the names of the recipients, the number of shares
underlying the grants, the type of options granted and the price at which such
grants may be exercised:

SHARES
NAME OF RECIPIENT UNDERLYING GRANT TYPE DATE OF GRANT(1) EXERCISE PRICE(2)
- ----------------- ---------------- ---- ---------------- -----------------

Walter M. Boomershine, Jr.*.............. 25,000 ISO IPO Date IPO Price
Robert W. Gundeck*....................... 300,000 ISO 4/22/98 $ 8.00
50,000 ISO IPO Date IPO Price
Charles K. Yancey*....................... 200,000 ISO 1/8/98 $ 6.27
240,000 ISO 4/22/98 $ 8.00
100,000 ISO IPO Date IPO Price
Stephen C. Whicker*...................... 200,000 ISO 1/8/98 $ 6.27
240,000 ISO 4/22/98 $ 8.00
100,000 ISO IPO Date IPO Price
Ricky L. Brown*.......................... 25,000 ISO 1/8/98 $ 6.27
70,000 ISO 4/22/98 $ 8.00
25,000 ISO IPO Date IPO Price
George D. Busbee**....................... 5,000 NSO IPO Date IPO Price
Lee M. Sessions, Jr.**................... 5,000 NSO IPO Date IPO Price
Jack R. Altherr**........................ 5,000 NSO IPO Date IPO Price
Michael F. O'Neill....................... 2,000 ISO IPO Date IPO Price
----------------
Total.......................... 1,592,000

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

* Executive officer of the Company.
** Director of the Company.
(1) "IPO Date" means the completion date of this Offering.
(2) "IPO Price" means the price of the common stock listed on the cover page of
this Prospectus.

In addition to such grants, the Company has granted to James E. L. Peters,
Jr., in connection with the Collision Centers USA Acquisition, NSOs to purchase
5,000 shares of common stock, each of which are exercisable at $8.00 per share
and vest six months following the completion of this Offering.

The issuance and exercise of ISOs have no federal income tax consequences
to the Company. While the issuance and exercise of ISOs generally have no
ordinary income tax consequences to the holder, upon the exercise of an ISO, the
holder will treat the excess of the fair market value on the date of exercise
over the exercise price as an item of tax adjustment for alternative minimum tax
purposes. If the holder of common stock acquired upon the exercise of an ISO
disposes of such stock before the later of (i) two years following the grant of
the ISO and (ii) one year following the exercise of the ISO (a "Disqualifying
Disposition"), the holder will recognize ordinary income for federal income tax
purposes in an amount equal to the lesser of (i) the excess of the common
stock's fair market value on the date of exercise over the option exercise
price, and (ii) the excess of the amount realized on disposition of the common
stock over the option exercise price. Any additional gain upon the disposition
will be taxed as capital gains. The disposition of common stock acquired from
the exercise of an ISO other than in a Disqualifying Disposition will ordinarily
result in capital gains or loss to the holder for federal income tax purposes
equal to the difference between the amount realized on disposition of the common
stock and the option exercise price. Any capital gain will be subject to reduced
rates of tax if such shares were held more than twelve months, and will be
subject to further reduced rates if such shares were held more than eighteen
months. The Company will be entitled to a compensation expense

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110

deduction for the Company's taxable year in which the disposition occurs equal
to the amount of ordinary income recognized by the holder.

The issuance of NSOs has no federal income tax consequences to the Company
or the holder. Upon the exercise of an NSO, the Company generally will be
allowed a federal income tax deduction equal to the amount by which the fair
market value of the underlying shares on the date of exercise exceeds the
exercise price. NSO holders will recognize ordinary income for federal income
tax purposes at the time of option exercise in the same amount. In the event of
a sale of shares acquired by exercise of a NSO, any appreciation or depreciation
after the exercise date generally will be taxed as capital gain or loss;
provided that any gain will be subject to reduced rates of tax if such shares
were held for more than twelve months and will be subject to further reduced
rates if such shares were held for more than eighteen months. The disposition of
shares acquired by exercise of a NSO will result in capital gains or losses to
the holder.

The Company intends to register the shares underlying the Incentive Stock
Plan as soon as practicable on Form S-8.

LIMITATIONS OF DIRECTORS LIABILITY

The Articles of the Company include a provision that effectively eliminates
the liability of directors to the Company or to the Company's shareholders for
monetary damages for breach of the fiduciary duties of a director, except for
any appropriation, in violation of the director's duties, of any business
opportunity of the Company, acts or omissions which involve intentional
misconduct or a knowing violation of law, certain actions with respect to
unlawful distributions and any transaction from which the director derived an
improper personal benefit. This provision does not prevent shareholders from
seeking nonmonetary remedies covering any such action, nor does it affect
liabilities under the federal securities laws. The Articles of Incorporation
further provide that the Company shall indemnify each of its directors and
officers against any liability (including counsel fees) which is allowed to be
paid or reimbursed by the Company under the laws of the State of Georgia and
which is actually and reasonably incurred in connection with any proceeding in
which such director or officer may be involved by reason of his or her having
been a director or officer of the Company. Georgia Law currently authorizes a
corporation to indemnify its directors and officers against the obligation to
pay a judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan), or reasonable expenses (including
counsels' fees) reasonably incurred by them in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative and whether formal or informal, if
such officers or directors conducted themselves in good faith and they
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe their conduct was unlawful. Indemnification is permitted in
more limited circumstances with respect to derivative actions. The Company
believes that these provisions of the Articles of Incorporation and the Bylaws
are necessary to attract and retain qualified persons to serve as directors and
officers. In addition, the Company anticipates carrying directors and officers
liability insurance as soon as practicable following the closing of the
Offering.

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PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of June 30, 1998, after giving effect
to the Merger and the Acquisitions, by (i) each shareholder who is known by the
Company to own beneficially more than 5% of the outstanding common stock, (ii)
each director of the Company, (iii) each of the executive officers of the
Company, and (iv) all directors and executive officers of the Company as a
group, and as adjusted to reflect the sale by the Company of the shares of
common stock in this Offering. Holders of Common Stock are entitled to one vote
per share on all matters submitted to a vote of the shareholders of the Company.
See "Description of Capital Stock."

PERCENTAGE OF
OUTSTANDING
AMOUNT AND COMMON STOCK OWNED
NATURE OF ----------------------
BENEFICIAL BEFORE AFTER
NAME OF BENEFICIAL OWNER(1) OWNERSHIP(2)(3) OFFERING OFFERING
- --------------------------- --------------- -------- --------

Walter M. Boomershine, Jr.(4).......................... 572,024 11.3% 5.4%
Charles K. Yancey...................................... 113,081 2.2 1.1
Robert W. Gundeck...................................... 63,640 1.3 *
Stephen C. Whicker..................................... 66,465 1.3 *
Ricky L. Brown......................................... 10,016 * *
Alan K. Arnold......................................... 385,000 7.6 3.7
George D. Busbee(5).................................... 5,000 * *
Lee M. Sessions, Jr.(5)................................ 5,000 * *
Jack R. Altherr(5)..................................... 5,000 * *
Walter M. Boomershine, III(4)(6)....................... 696,696 13.8 6.6
Renee B. Jochum(4)(7).................................. 633,360 12.5 6.0
Jacquelyn B. Thompson(4)(8)............................ 633,360 12.5 6.0
Patrice B. Mitchell(4)(9).............................. 633,360 12.5 6.0
Lindsey B. Robertson(4)(10)............................ 673,360 13.3 6.4
All directors and executive officers as a group (9
persons)............................................. 1,225,226 24.2% 11.6%

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

* Represents beneficial ownership of less than 1% of the total outstanding
shares of the Company.
(1) Unless otherwise noted, the address of all persons listed is c/o Sunbelt
Automotive Group, Inc., 5901 Peachtree-Dunwoody Rd., Suite 250-B, Atlanta,
GA 30328.
(2) Beneficial ownership is determined in accordance with the rules of the
Commission. Shares of common stock subject to options, warrants or other
rights to purchase which are currently exercisable or are exercisable
within 60 days after the completion of the Offering are deemed outstanding
for computing the percentage ownership of the persons holding such options,
warrants or rights, but are not deemed outstanding for computing the
percentage ownership of any other person. Unless otherwise indicated, each
person possesses sole voting and investment power with respect to the
shares identified as beneficially owned.
(3) The numbers with respect to Alan K. Arnold and Lindsey B. Robertson (with
respect to the shares to be issued to E. Moss Robertson, Jr.) assume that
the Offering price is $10.00 per share.
(4) Walter M. Boomershine, III, Renee B. Jochum, Jacquelyn B. Thompson, Patrice
B. Mitchell and Lindsey B. Robertson are all adult children of Walter M.
Boomershine, Jr. Each of said persons disclaims beneficial ownership
pursuant to the rules under the Exchange Act of the common stock attributed
to the others.
(5) Consists of 5,000 shares of common stock issuable upon the exercise of
options granted to each of Mr. Busbee, Mr. Sessions and Mr. Altherr as a
non-employee director, pursuant to the Company's Incentive Stock Plan. See
"Director Compensation."
(6) Includes 126,672 shares to be issued to The WMB, III Family Trust, for
which Mr. Boomershine, III serves as the sole Trustee, and 116,116 shares
to be issued to The WMB, III/LKB Family Trust U/A, for which Lucinda K.
Boomershine, who is the spouse of Walter M. Boomershine, III, serves as the
sole trustee.

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(7) Includes 536,245 shares to be issued to The RBJ Family Trust, for which Ms.
Jochum serves as the sole Trustee. The address of Ms. Jochum is 6 Starlight
Ct., Potomac, MD 20854.
(8) Includes 536,245 shares to be issued to The JBT Family Trust, for which Ms.
Thompson serves as the sole Trustee. The address of Ms. Thompson is 219
Bates Rd., Cartersville, GA 30120.
(9) Includes 536,245 shares to be issued to The PBM Family Trust, for which Ms.
Mitchell serves as the sole Trustee. The address of Ms. Mitchell is 2074
Shillingwood Dr., Kennesaw, GA 30144.
(10) Includes 536,245 shares to be issued to The LBR Family Trust, for which Ms.
Robertson serves as the sole Trustee, and 40,000 pro forma shares to be
issued to E. Moss Robertson, Jr., who is Ms. Robertson's husband, upon
consummation of the ROC Acquisition. Ms. Robertson disclaims beneficial
ownership under the rules of the Exchange Act of the shares owned by Mr.
Robertson. The address of Ms. Robertson is c/o Robertson
Oldsmobile-Cadillac, Inc., 2355 Browns Bridge Rd., Gainesville, GA 30504.

CERTAIN TRANSACTIONS

CERTAIN DEALERSHIP LEASES

Certain of the properties leased by the dealerships that the Company owns
or expects to acquire upon consummation of the Offering are owned by officers,
directors or holders of 5% or more of the common stock of the Company or their
affiliates (the "Related Party Leases"). The Company believes that the terms and
conditions of each of these leases are no less favorable than those that could
be obtained from non-affiliated parties. Each of the Related Party Leases and
the rent payable thereunder are described below. For a more complete description
of the location, use and expiration date of each lease, see
"Business -- Facilities."

During 1995, 1996 and 1997, and continuing after the Offering, the entities
listed below have leased and will continue to lease the real properties on which
their dealerships or operations are located from limited partnerships (WINCO I,
L.P., WINCO II, L.P. and WINCO III, L.P.) controlled by Walter M. Boomershine,
Jr., who is the Chairman of the Board and Senior Vice President of the Company,
and owned by Walter M. Boomershine, Jr. and his family:

ANNUAL
FRANCHISE/SUBSIDIARY RENTAL PAYMENT
- -------------------- --------------

Boomershine Ford and Boomershine Isuzu...................... $480,000
Collision Centers USA (Duluth center)....................... 240,000
Boomershine Pontiac-Buick-GMC, Inc.......................... 281,388
Boomershine Hummer.......................................... 130,800
Boomershine Nissan.......................................... 210,000
Boomershine Mitsubishi...................................... 180,000

Each of these leases requires the respective lessees to pay the taxes,
insurance and maintenance expenses related to the applicable leased property.

Wade Ford, Inc. leases one of the two parcels of real property on which its
dealership is located (the "Wade Lease"), and Wade Ford Buford, Inc. leases the
parcel on which its dealership is located (the "Wade Buford Lease"), from Mr.
Alan K. Arnold, who is a director of the Company. The other parcel on which Wade
Ford, Inc.'s dealership is located is owned by an unaffiliated third party. The
Wade Lease annual rental payments during Wade Ford, Inc.'s last fiscal year were
$420,000, and the Wade Buford Lease annual rental payments during Wade Ford
Buford, Inc.'s last fiscal year were $240,000. Both leases require the
respective subsidiaries to pay the taxes, insurance and maintenance expenses
related to the leased property.

Robertson Oldsmobile-Cadillac, Inc. leases the real property on which its
dealerships are located from Mr. E. Moss Robertson, Jr., who is the son-in-law
of Mr. Walter M. Boomershine, Jr., the Chairman of the Board and Senior Vice
President of the Company. Prior to the Offering, the annual rental payments
under the lease were $180,000 for 1997 and $149,600 for 1996. As part of the
Acquisition, Mr. Robertson and the Company have agreed to replace the existing
lease with a new lease agreement, pursuant to which the annual

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rental payment of said lease will be $204,000 for the first and second lease
years, $216,000 for the third through fifth lease years, and $240,000 beginning
with the sixth lease year and thereafter until the end of the initial term of
the lease. The lease also requires Robertson Oldsmobile-Cadillac, Inc. to pay
the taxes, insurance and maintenance expenses related to the leased property.

CERTAIN BUSINESS RELATIONSHIPS

In connection with the South Financial Acquisition, Boomershine Automotive
borrowed the sum of $4.5 million from WINCO I, L.P., a limited partnership
controlled by Walter M. Boomershine, Jr. and owned by Walter M. Boomershine, Jr.
and his family. This loan was made pursuant to a promissory note which matured
on July 7, 1998 and carried an interest rate equal to the prime rate of interest
announced by NationsBank, N.A. from time to time. Boomershine Automotive has
renewed this promissory note on the same terms and conditions for a period of 90
days and has the option to refinance the loan for an additional term of five
years subsequent to said maturity date, at an interest rate to 8% per annum,
using a 20-year amortization. The Company believes that this transaction was
made on terms that are no less favorable than those that could be obtained from
non-affiliated parties.

PROMISSORY NOTES

On April 22, 1998, the Company's Board of Directors granted to Messrs.
Gundeck, Yancey, Whicker and Brown, each of whom is an executive officer of the
Company, the right to purchase shares of common stock of the Company at a price
of $8.00 per share. Messrs. Gundeck, Yancey, Whicker and Brown elected to
purchase 63,640, 111,081, 64,465 and 10,016 shares of common stock of the
Company, respectively (collectively, the "Executive Shares"), and each executed
a five-year promissory note in favor of the Company (collectively, the
"Executive Notes") in the principal amounts of $509,120, $888,648, $515,720 and
$80,128, respectively. The Executive Notes, which bear interest at a rate of 8%
per annum, require annual payments of interest and a single payment of the
entire principal balance at the end of the five-year term. The Company believes
that these Executive Notes were made on terms that are no less favorable than
those that could be obtained from non-affiliated parties.

In connection with an employee savings plan, Boomershine Automotive Group,
Inc. granted to WINCO I, L.P., WINCO II, L.P., WINCO III, L.P. (collectively,
the "WINCO Partnerships") and to certain shareholders and an executive officer
of Boomershine Automotive promissory notes which, as of March 31, 1998, had an
outstanding aggregate principal balance of $2,416,544. Specifically, as of March
31, 1998, the promissory note due to the WINCO Partnerships, which are owned and
controlled by Walter M. Boomershine, Jr., who is Chairman of the Board and
Senior Vice President of the Company, and his family, had an outstanding
principal balance of $832,306, and the promissory notes due to certain
individuals (Walter M. Boomershine, Jr. and Patrice B. Mitchell, a shareholder
of Boomershine Automotive, Winfred Boomershine and Randy Thompson, who are all
relatives of Walter M. Boomershine, Jr.) and the executive officer of
Boomershine Automotive (Charles K. Yancey, who is an executive officer of the
Company) had an outstanding aggregate principal balance of $1,584,238. Each of
these promissory notes is unsecured, is due on demand, pays interest on a
monthly basis at a rate equal to the prime rate of interest and requires
repayments of principal on a semi-annual basis. The Company believes that these
promissory notes were made on terms that are no less favorable than those that
could be obtained from non-affiliated parties.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company's authorized capital stock consists of (i) 450,000,000 shares
of common stock, $0.001 par value, and (ii) 50,000,000 shares of preferred
stock, $0.001 par value. Upon completion of this Offering, the Company will have
10,557,862 outstanding shares of common stock (assuming the Underwriters' over-
allotment option is not exercised) and no outstanding shares of preferred stock.

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The following summary description of the Company's capital stock does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation, which are filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the relevant
provisions of Georgia law. Reference is made to such exhibit and Georgia law for
a detailed description of the provisions thereof summarized below.

COMMON STOCK

As of May 14, 1998, there were 255,202 shares of common stock outstanding
held of record by four shareholders, and options to purchase an aggregate of
1,280,000 shares of common stock were outstanding, none of which was exercisable
as of May 14, 1998. After giving effect to the sale of 5,500,000 shares of
common stock by the Company in this Offering, there will be 10,557,862 shares
outstanding (11,382,862 if the Underwriter's over-allotment option is exercised
in full). Holders of common stock have one vote per share on all matters
submitted to a vote of the shareholders of the Company, including with respect
to the election of directors.

Subject to the prior rights of holders of preferred stock, if any, holders
of the common stock are entitled to receive ratably such dividends, if any, as
are declared by the Company's Board of Directors out of funds legally available
for that purpose. However, as discussed under "Dividend Policy," the Company
currently does not intend to pay any cash dividends. Shareholders of the Company
have no preemptive or other rights to subscribe for additional shares. In the
event of the liquidation, dissolution or winding up of the Company, holders of
common stock are entitled to share ratably in all assets available for
distribution to holders of common stock after payment in full of creditors and
any rights of preferred shareholders. No shares of any class of common stock are
subject to a redemption or a sinking fund. All outstanding shares of common
stock are, and all shares offered by this Prospectus will be, when sold, validly
issued, fully paid and nonassessable.

PREFERRED STOCK

The Company's Articles authorize the Board of Directors to issue up to
50,000,000 shares of preferred stock in one or more series and to establish such
designations and relative voting, dividend, liquidation, conversion, redemption,
liquidation and other rights, preferences and limitations as the Board of
Directors may determine without any further approval of the shareholders of the
Company. The issuance of preferred stock by the Board of Directors, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes could, among other things, adversely affect the voting
power of the holders of common stock and, under certain circumstances, make it
more difficult for a person or group to gain control of the Company. See "Risk
Factors -- Anti-Takeover Provisions." The issuance of any series of preferred
stock, and the relative designations, rights, preferences and limitations of
such series, if and when established, will depend upon, among other things, the
future capital needs of the Company, the then-existing market conditions and
other factors that, in the judgment of the Board of Directors, might warrant the
issuance of preferred stock. At the date of this Prospectus, no shares of
preferred stock are outstanding and there are no plans, agreements or
understandings for the issuance of any shares of preferred stock.

WARRANTS

On March 13, 1998, the Company granted warrants to purchase 50,000 shares
of common stock to Tatum CFO Partners, L.P. in consideration for certain
financial and accounting consulting services rendered in connection with this
Offering. These warrants vest equally on a quarterly basis at 8,333 shares per
quarter, and have an exercise price of $8.00 per share. As of the date of this
Prospectus, 16,666 shares of common stock underlying these warrants are
immediately exercisable and the remaining warrants will vest ratably on a
quarterly basis over the next year. These warrants will expire, if not
exercised, 10 years after the date on which they were granted.

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REGISTRATION RIGHTS AND STOCK PRICE PROTECTION

As part of the Acquisitions, the Company entered into a registration rights
agreement with the selling shareholders of the Wade Ford Dealerships and the
sole shareholder of Robertson Oldsmobile-Cadillac, Inc. (each, a "Registration
Rights Agreement" and collectively, the "Registration Rights Agreements").
Subject to certain limitations, the Registration Rights Agreements provide those
shareholders with certain piggyback registration rights that permit them to have
their shares of unregistered common stock, as selling security holders, included
in any registration statement pertaining to the registration of the Company's
common stock for issuance by the Company or for resale by other selling security
holders, with the exception of initial public offerings of the common stock,
registrations relating solely to employee benefits plans and registrations
relating solely to a transaction pursuant to Rule 145 under the Securities Act.
These registration rights will be limited or restricted to the extent an
underwriter of an offering, if an underwritten offering, or the Company's Board
of Directors, if not an underwritten offering, determines that the amount of the
common stock to be registered pursuant to any Registration Rights Agreement
would not permit the sale of the registered common stock in the quantity and at
the price originally sought by the Company or the original selling security
holders, as the case may be. Additionally, the Company has contractually agreed
to provide certain price protection with respect to the unregistered common
stock of the Company (the "Price Protection Stock") to the selling shareholders
of the Wade Ford Dealerships and Day's Chevrolet. Specifically, if the price of
the common stock subject to price protection is more on the date of the Offering
than the price of such common stock (i) on the first anniversary of the Offering
in the case of the Wade Ford Acquisition or (ii) on the second anniversary of
the Offering in the case of the Day's Chevrolet Acquisition, then the Company is
required to compensate the applicable target shareholders for such price
decrease in cash or by issuing additional shares of the Company's common stock
(however, pursuant to current policies of the Commission, the Company would not
be able to deliver registered stock to Day's Chevrolet and, therefore, would be
required to compensate the Day's Chevrolet shareholders in cash for any such
decrease).

GEORGIA LAW, CERTAIN ARTICLES AND BYLAW PROVISIONS AND CERTAIN FRANCHISE
AGREEMENT PROVISIONS

Certain provisions of Georgia law and of the Company's Articles and Bylaws,
summarized in the following paragraphs, may be considered to have an
anti-takeover effect and may delay, deter or prevent a tender offer, proxy
contest or other takeover attempt that a shareholder might consider to be in
such shareholder's best interest, including such an attempt as might result in
payment of a premium over the market price for shares held by shareholders
unless the takeover or change of control is approved by the Company's Board of
Directors. Such provisions may also make the removal of directors and management
more difficult.

Georgia Anti-takeover Law. The GBCC restricts certain business
combinations with "interested shareholders" (as defined below) (the "Business
Combination Statute"), and contains fair price requirements applicable to
certain mergers with certain interested shareholders (the "Fair Price Statute").
In accordance with the provisions of these statutes, the Company must elect in
its Bylaws to be covered by the restrictions imposed by these statutes. The
Company has elected to be covered by such restrictions in its Bylaws, and such
bylaw provisions may only be repealed upon a vote of at least two-thirds of
continuing directors and a majority of the voting shares of the Company.
Furthermore, shareholders may amend or repeal the Company's Bylaws or adopt new
Bylaws (even though these Bylaws may also be amended or repealed by the Board of
Directors).

The Business Combination Statute regulates business combinations such as
mergers, consolidations, share exchanges and asset purchases where the acquired
business has at least 100 shareholders residing in Georgia and has its principal
office in Georgia, as the Company does, and where the acquiror became an
interested shareholder of the corporation, unless either: (i) the transaction
resulting in such acquiror becoming an interested shareholder or the business
combination received the approval of the corporation's board of directors prior
to the date on which the acquiror became an interested shareholder; or (ii) the
acquiror became the owner of at least 90% of the outstanding voting shares of
the corporation (excluding any shares held by certain other persons) in the same
transaction in which the acquiror became an interested shareholder. For purposes
of the Business Combination Statute and the Fair Price Statute, an "interested
shareholder" generally is any person who directly or indirectly, alone or in
concert with others, beneficially owns or controls

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10% or more of the voting power of the outstanding voting shares of the
corporation. The Business Combination Statute prohibits business combinations
with an unapproved interested shareholder for a period of five years after the
date on which such person became an interested shareholder.

The Fair Price Statute prohibits certain business combinations between a
Georgia business corporation and an interested shareholder. The Fair Price
Statute would permit the business combination to be effected if: (i) certain
"fair price" criteria are satisfied; (ii) the business combination is
unanimously approved by the continuing directors; (iii) the business combination
is recommended by at least two-thirds of the continuing directors and approved
by a majority of the votes entitled to be cast by holders of voting shares,
other than voting shares beneficially owned by the interested shareholder; or
(iv) the interested shareholder has been such for at least three years and has
not increased his ownership position in such three-year period by more than one
percent in any 12-month period. The Fair Price Statute is designed to inhibit
unfriendly acquisitions that do not satisfy the specified "fair price"
requirements.

Classified Board of Directors. The Company's Articles and Bylaws provide
for the Board of Directors to be divided into three classes of directors serving
staggered three-year terms. As a result, approximately one-third of the Board of
Directors will be elected each year, and it will take at least two meetings of
the Company's shareholders in order to change the majority of the directors.
Classification of the Board of Directors increases the time required to change
the composition of a majority of directors and may tend to discourage a takeover
bid for the Company. Moreover, in order to remove a director without cause, the
Articles of Incorporation require the vote of at least eighty percent of the
eligible shares; removal for cause requires the vote of a majority of eligible
shares. Director's positions that become vacant as a result of a removal by the
shareholders may be filled by the shareholders, or, if authorized by the
shareholders, by a majority vote of the Board of Directors. Director's positions
that become vacant due to the death, resignation or retirement of a director may
be filled by a majority vote of the remaining directors. This above-referenced
provision may preclude or hinder shareholders of the Company from removing
incumbent directors without cause, simultaneously gaining control of the Board
of Directors by filing the vacancies with their own nominees. See
"Management -- Executive Officers and Directors; Key Personnel."

Special Meetings of Shareholders. The Company's Articles and Bylaws
provide that special meetings of shareholders may be called only by (i) the
Chairman, Chief Executive Officer or Secretary of the Company, (ii) by a
majority vote of the Board of Directors of the Company or (iii) upon written
demand of the holders of at least 75% of all votes entitled to be cast on any
issue proposed to be considered at such meeting. These provisions may make it
more difficult for shareholders to take action opposed by the Board of
Directors.

Advance Notice Requirements for Shareholder Proposals and Director
Nominations. The Company's Bylaws provide that shareholders seeking to bring
business before an annual meeting of shareholders, or to nominate candidates for
election as directors at an annual or a special meeting of shareholders, must
provide timely notice thereof in writing. To be timely, a shareholder's notice
must be delivered to, or mailed and received at, the principal executive office
of the Company at least sixty (60) days prior to the date of such annual or
special meeting. The Bylaws also specify certain requirements for a
shareholder's notice to be in proper written form. These provisions may preclude
some shareholders from bringing matters before the shareholders at an annual or
special meeting or from making nominations for directors at an annual or special
meeting.

Restrictions under Franchise Agreements. The manufacturers' agreements
relating to public companies impose various restrictions on the transfer of the
common stock. A number of manufacturers prohibit transactions which affect
changes in management control of the Company. For instance, Ford may cause the
Company to sell or resign from its Ford franchises if any person or entity
acquires 15% or more of the Company's voting securities. Likewise, GM, Toyota
and Nissan may force the sale of their respective franchises if 20% or more of
the Company's voting securities are so acquired. Chrysler also generally
approves of the public sale of only 50% of the common stock of a public company
and requires prior approval of any future sales that would result in a change in
voting or managerial control of such a public company. All or some of the
restrictions may apply to the Company once the Company reaches an agreement with
each respective manufacturer. Such restrictions may prevent or deter prospective
acquirors from obtaining control

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of the Company. See "Risk Factors -- Stock Ownership/Issuance Limits; Limitation
on Ability to Issue Additional Equity" and "Business -- Relationships with
Manufacturers."

LISTING

The Company's common stock has been approved for quotation on the Nasdaq
National Market under the symbol "SBLT", subject to notice of issuance.

TRANSFER AGENT AND REGISTRAR

The Company has appointed SunTrust Bank, Atlanta as the transfer agent and
registrar for the common stock.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, the Company will have outstanding
10,557,862 shares of common stock (assuming no exercise of the Underwriters'
over-allotment option). All of such shares will be freely transferable and may
be resold without further registration under the Securities Act; except for any
shares held by an "affiliate" of the Company (as that term is defined in Rule
144), any shares received by any shareholders in connection with any of the
Acquisitions or the Merger and any shares issued to officers of the Company
pursuant to certain employment contracts, which shares will be subject to the
resale limitations of Rule 144. In general, under Rule 144 as currently in
effect, a person (or persons whose shares are aggregated) who has beneficially
owned "restricted securities" for at least one year may, under certain
circumstances, resell within any three-month period, such number of shares as
does not exceed the greater of one percent of the then-outstanding shares of
common stock or the average weekly trading volume of common stock during the
four calendar weeks prior to such resale. Rule 144 also permits, under certain
circumstances, the resale of shares without any quantity limitation by a person
who has satisfied a two-year holding period and who is not, and has not been for
the preceding three months, an affiliate of the Company. In addition, holding
periods of successive non-affiliate owners are aggregated for purposes of
determining compliance with these one- and two-year holding period requirements.
Sales under Rule 144 are also subject to certain provisions relating to the
manner of sale, notice of sale, and availability of current public information
about the Company. The Company has reserved for issuance 1,597,000 shares of
common stock, which underlie options granted under the Company's Incentive Stock
Plan, and 50,000 shares of common stock, which underlie warrants issued to a
consulting firm, and the Company intends to file a registration statement on
Form S-8 with the Commission following completion of this Offering to register
the shares of the common stock issuable under the Incentive Stock Plan and the
consultant warrants.

The availability of shares for sale or actual sales under Rule 144 and the
Form S-8 registration statement and the perception that such shares may be sold
may have a material adverse effect on the market price of the common stock.
Sales under Rule 144 and the Form S-8 registration statement also could impair
the Company's ability to market additional equity securities. Additionally, the
Company has entered into the Registration Rights Agreement with the shareholders
of Wade Ford, Inc., Wade Ford Buford, Inc. and Robertson Oldsmobile-Cadillac,
Inc., which provides piggyback registration rights with respect to all of the
shares of common stock that the selling shareholders in said acquisitions will
receive. For further information regarding the Registration Rights Agreement,
see "Description of Capital Stock -- Registration Rights and Stock Price
Protection."

The Company, its executive officers and directors, and the holders of the
Company's unregistered common stock have agreed, subject to certain exceptions,
(i) not, directly or indirectly, without the prior written consent of the
Underwriter, to sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of any shares of common stock of the Company, options or
warrants to acquire shares of common stock, or securities exchangeable or
exercisable for or convertible into shares of common stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
the Exchange Act) by such person, or publicly announce such person's intention
to do any of the foregoing, until after the close of trading on the date 180
days after the date of this Prospectus; and (ii) to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of common stock or securities convertible into or
exchangeable or exercisable for common stock held by such person except in
compliance with the foregoing restrictions; provided that the Company may sell
shares of common stock to a third party as consideration for the Company's
acquisition from such third party of an automobile dealership, so long as such
third party executes a lock up agreement on substantially the same terms
described above for a period expiring 180 days after the date of this
Prospectus.

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119

CERTAIN UNITED STATES FEDERAL TAX
CONSIDERATIONS FOR NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of the
Company's common stock by a "Non-United States Holder." A "Non-United States
Holder" is a person other than a "U.S. Person." For United States federal income
tax purposes, the term "U.S. Person" means (i) any individual who is a citizen
or resident of the United States; (ii) a corporation or partnership created or
organized in the United States or under the laws of the United States or of any
state (other than any partnership treated as foreign under United States
Treasury regulations); (iii) an estate or trust, the income of which is
includable in gross income for United States federal income tax purposes
regardless of its source; or (iv) a trust, if a court within the United States
is able to exercise primary supervision over the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust.

This discussion is based on the Code and administrative interpretations as
of the date hereof, all of which may be changed either retroactively or
prospectively. This discussion does not address all aspects of United States
("U.S.") federal income and estate taxation that may be relevant to Non-United
States Holders in light of their particular circumstances and does not address
any tax consequences arising under the laws of any state, local or foreign
taxing jurisdiction.

PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE
UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES INCOME AND ESTATE TAX
CONSEQUENCES TO THEM OF HOLDING AND DISPOSING OF COMMON STOCK OF THE COMPANY.

DIVIDENDS

Subject to the discussion below, generally dividends paid on the Company's
common stock to a Non-United States Holder not engaged in trade or business in
the United States will be subject to withholding tax at a 30% rate; or such
lower rate as may be specified by an applicable income tax treaty; provided the
dividends are not under the applicable treaty attributable to a United States
permanent establishment of the Non-United States Holder.

If the Non-United States Holder is engaged in trade or business in the
United States, the flat 30% tax rate will not apply unless it can be shown that
the dividend is not effectively connected with that trade or business. Generally
a Form 4224 would be used for this purpose.

If the dividends are effectively connected with the Non-United States
Holder's conduct of a trade or business within the United States or, if an
income tax treaty applies and the dividends are attributable to a United States
permanent establishment of the Non-United States Holder, they will generally be
subject to regular U.S. graduated income tax rates. A Non-United States
corporation that operates a business in the United States may also be subject to
a "branch profits tax" equal to 30% (or such lower rate as may be specified in
an applicable treaty) of the corporation's dividend equivalent amount. This tax
is in addition to U.S. corporate income tax on its effectively connected income.

In order to claim the benefit of an applicable tax treaty rate, a
Non-United States Holder may have to file with the Company or its dividend
paying agent an exemption or reduced treaty rate certificate or letter in
accordance with the terms of such treaty. Under United States Treasury
regulations currently in effect, for purposes of determining whether tax is to
be withheld at a 30% rate or at a reduced rate as specified by an income tax
treaty, the Company ordinarily will presume that dividends paid to an address in
a foreign country are paid to a resident of such country absent knowledge that
such presumption is not warranted (the "address rule"). However, on October 6,
1997, the U.S. Treasury Department issued final regulations on withholding of
income tax payments to foreign persons, effective January 1, 2000, which will
abolish the address rule for purposes of claiming a reduced treaty rate.
Effective January 1, 2000, a Non-United States Holder seeking a reduced rate of
withholding under an income tax treaty would generally be required to provide to
the Company a valid Internal Revenue Service Form W-8 certifying that such
Non-United States Holder is entitled to

117
120

benefits under an income tax treaty. The final regulations also provide special
rules for determining whether, for purposes of assessing the applicability of an
income tax treaty, dividends paid to a Non-United States Holder that is an
entity should be treated as being paid to the entity itself or to the persons
holding an interest in that entity. A Non-United States Holder who is eligible
for a reduced withholding rate may obtain a refund of any excess amounts
withheld by filing an appropriate claim for a refund with the Internal Revenue
Service. Investors should note, however, that there appears to be a growing
trend for the United States to include anti-treaty shopping provisions in tax
treaties. Therefore, there can be no assurance that investors receiving
dividends will be entitled to tax treaty relief if their claims to treaty
benefits are not based on actual residency that has economic substance.

GAIN ON DISPOSITION OF COMMON STOCK

A Non-United States Holder not engaged in trade or business in the United
States generally will not be subject to U.S. federal income tax with respect to
gain realized on a sale or other disposition of the Company's common stock
unless:

- In the case of an individual, he or she is present in the United States
for at least 183 days during the year in which the stock is sold. If the
individual is present in the United States for 183 days in the year of
sale, gain not effectively connected with a trade or business in the
United States is taxed at a flat 30% or lower applicable treaty rate. If
the income is effectively connected with a U.S. trade or business, it is
subject to regular U.S. capital gain tax rates.

- In the case of a Non-United States Holder that is a corporation, the gain
will be taxed in the United States at U.S. capital gain tax rates, if it
is effectively connected with the conduct by the corporation of trade or
business in the United States by the corporation.

- Special rules apply if the Non-United States Holder is subject to tax,
pursuant to the provisions of U.S. tax law applicable to certain U.S.
expatriates whose loss of U.S. citizenship had as one of its principal
purposes the avoidance of U.S. taxes.

- Special rules apply if the Company becomes a "United States real property
holding corporation" within the meaning of sec.sec. 897(c)(2) of the
United States Internal Revenue Code and the Non-United States Holder
held, directly or indirectly, at any time within the five-year period
preceding such disposition, more than 5% of the outstanding common stock
of the Company. Based upon its current and anticipated assets, the
Company believes that it will not become a United States real property
holding corporation. However, since the determination of United States
real property holding corporation status in the future will be based upon
the composition of the assets of the Company from time to time, there can
be no assurance that the Company will not become a United States real
property holding corporation in the future, in which case gain in the
sale of the Company's stock may be subjected to United States tax.

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING

Under United States Treasury regulations, the Company must report annually
to the Internal Revenue Service and to each Non-United States Holder the amount
of dividends paid to such Holder and any tax withheld with respect to such
dividends. These information reporting requirements apply even if withholding
was not required because the dividends were effectively connected with a trade
or business in the United States of the Non-United States Holder or withholding
was reduced or eliminated by an applicable income tax treaty. Copies of the
information returns reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the Non-United States
Holder is a resident under the provisions of an applicable income tax treaty or
agreement.

United States backup withholding (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
certain information under the United States information reporting requirements)
generally will not apply to: (i) dividends paid to Non-United States Holders
that are subject to the 30% withholding discussed above (or that are not so
subject because a tax treaty applies that

118
121

reduces or eliminates such 30% withholding); or (ii) under current law,
dividends paid to a Non-United States Holder at an address outside of the United
States. However, under final United States Treasury regulations, effective as of
January 1, 2000, a Non-United States Holder generally would be subject to backup
withholding at a 31% rate, unless certain certification procedures (or, in the
case of payments made outside the United States with respect to an offshore
account, certain documentary evidence procedures) are complied with, directly or
through an intermediary. Backup withholding and information reporting generally
will apply to dividends paid to addresses inside the United States on shares of
the Company's common stock to beneficial owners that are not "exempt recipients"
and that fail to provide in the manner required certain identifying information.

The payment of the proceeds of the disposition of the Company's common
stock to or through the U.S. office of a broker is subject to information
reporting unless the disposing holder, under penalty of perjury, certifies its
NonUnited States status or otherwise establishes an exemption. Generally, U.S.
information reporting and backup withholding will not apply to a payment of
disposition proceeds if the payment is made outside the U.S. through a NonUnited
States office of a Non-United States broker. However, information reporting
requirements (but probably, prior to January 1, 2000, not backup withholding)
will apply to a payment of disposition proceeds outside the U.S. if: (A) the
payment is made through an office outside the U.S. of a broker that is either:
(i) a U.S. person; (ii) a foreign person which derives 50% or more of its gross
income for certain periods from the conduct of a trade or business in the U.S.;
(iii) a "controlled foreign corporation" for U.S. federal income tax purposes;
or (iv) effective January 1, 2000, but probably not prior to such date, a
foreign broker that is: (1) a foreign partnership, one or more of whose partners
are U.S. persons who, in the aggregate hold more than 50% of the income or
capital interest in the partnership at any time during its tax year; or (2) a
foreign partnership engaged at any time during its tax year in the conduct of a
trade or business in the United States; and (B) the broker fails to maintain
documentary evidence that the holder is a Non-United States Holder and that
certain conditions are met, or that the Holder otherwise is entitled to an
exemption.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the Internal
Revenue Service.

FEDERAL ESTATE TAX

For United States federal income tax purposes, common stock of the Company
that is held by a non-resident alien is deemed property within the United
States. Accordingly, a non-resident alien who is treated as the owner of or has
made certain lifetime transfers of an interest in the Company's common stock may
be required to include the value thereof in his gross estate for U.S. federal
estate tax purposes, and may be subject to U.S. federal estate tax unless an
applicable estate tax treaty provides otherwise. Estates of non-resident aliens
are generally allowed a statutory credit of $13,000 which generally has the
effect of offsetting the U.S. federal estate tax imposed on the first $60,000 of
the taxable estate. However, this credit may be adjusted by an applicable estate
tax treaty.

THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT HIS TAX ADVISOR WITH
RESPECT TO THE UNITED STATES FEDERAL INCOME TAX AND FEDERAL ESTATE TAX
CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF THE COMPANY'S COMMON STOCK, AND
THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, LOCAL FOREIGN OR OTHER
TAXING JURISDICTION.

119
122

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), through their representative
Raymond James & Associates, Inc. (the "Representative"), have severally agreed
to purchase from the Company the following respective number of shares of common
stock at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus:

NUMBER OF
NAME SHARES
- ---- ---------

Raymond James & Associates, Inc.............................

-------
Total.............................................
=======

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of common stock
offered hereby are subject to approval of certain legal matters by their counsel
and to certain other conditions. The Underwriters are obligated to take and pay
for all shares of common stock offered hereby (other than those covered by the
over-allotment option described below) if any such shares are purchased.

The Underwriters, through the Representative, propose to offer the shares
of common stock directly to the public at the public offering price set forth on
the cover page of this Prospectus and part of the shares to certain dealers at a
price that represents a concession not in excess of $ per share under
the public offering price. The Underwriters may allow, and such dealers may
re-allow, a concession not in excess of $ per share to certain other
dealers. The Representative has advised the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

The Company has granted the Underwriters an option exercisable not later
than 30 days after the date of this Prospectus, to purchase up to an aggregate
of 825,000 additional shares of common stock, at the public offering price, less
the underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof as the number of shares of common stock to be purchased by
them shown in the above table bears to the total shown, and the Company will be
obligated, pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise their option only to cover over-allotments made in
connection with the sale of the shares of common stock offered hereby. If
purchased, the Underwriters will sell such additional shares on the same terms
as those on which the shares are being offered.

The Company has agreed to indemnify the Underwriters against, or to
contribute to, losses arising out of certain liabilities in connection with this
Offering, including liabilities under the Securities Act. The Company has paid
$75,000 to the Underwriters as an advance against actual out-of-pocket expenses
incurred by the Underwriters in connection with this Offering. The Underwriters
have agreed to reimburse any portion of the advance not applied to such
expenses.

At the request of the Company, the Underwriters have reserved for sale, at
the initial public offering price, up to shares of common stock to be
sold and offered hereby by the Company to certain employees and customers of the
Company and other persons. The number of shares of common stock

120
123

available for sale to the general public will be reduced to the extent such
persons purchase such reserved shares. Any reserved shares which are not orally
confirmed for purchase within one day of the pricing of the Offering will be
offered by the Underwriters to the general public on the same terms as the other
shares offered hereby. Certain individuals purchasing reserved shares may be
required to agree not to sell, offer or otherwise dispose of any shares of
common stock for a period of 180 days after the date of this Prospectus.

Prior to this Offering, there has been no public market for the common
stock of the Company. The initial public offering price the common stock will be
determined by negotiation between the Company and the Representative. Among the
factors to be considered in such negotiations are prevailing market conditions,
the value of publicly traded companies believed to be comparable to the Company,
the results of operations of the Company in recent periods, estimates of the
business potential of the Company, the present state of the Company's
development and other factors deemed relevant.

The Representative, acting on behalf of the Underwriters, may over-allot
the shares offered hereby and, during the course of this Offering, may engage in
stabilizing and syndicate short covering and may impose a penalty bid on members
of the Offering syndicate. Over-allotment involves sales of shares in excess of
the total number being offered, thereby creating a syndicate short position.
Stabilizing involves a bid by the syndicate to purchase shares in the open
market at a specified price, which may not exceed the public offering price and
may be decreased but not increased. Syndicate short covering involves open
market purchases of shares to cover all or a portion of the syndicate short
position created by over-allotments. A penalty bid permits the Representative to
reclaim selling concessions from a syndicate member when shares sold by that
member in the Offering are purchased by the Representative in the open market to
cover a syndicate short position or pursuant to a stabilizing bid. All of these
activities may cause the market price of the common stock to be higher than
otherwise might be the case in the absence of these activities. These
transactions may be effected on the Nasdaq National Market or otherwise and, if
commenced, may be discontinued at any time.

The foregoing includes a summary of certain principal terms of the
Underwriting Agreement and does not purport to be complete. Reference is made to
the copy of the Underwriting Agreement that is on file as an exhibit to the
Registration Statement on Form S-1 (the "Registration Statement") under the
Securities Act and filed by the Company with the Commission with respect to the
shares of common stock offered hereby, of which this Prospectus is a part.

121
124

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for the Company by Schnader Harrison Segal & Lewis LLP, Atlanta, Georgia.
Troutman Sanders LLP, Atlanta, Georgia, has served as counsel to the
Underwriters in connection with this Offering.

EXPERTS

The financial statements of Sunbelt Automotive Group, Inc. at March 31,
1998 and for the period from December 17, 1997 (inception) to March 31, 1998,
the consolidated financial statements of Boomershine Automotive Group, Inc. and
Subsidiaries at June 30, 1996 and 1997 and the three years in the period ended
June 30, 1997, the financial statements of Jay Automotive Group, Inc. at
December 31, 1996 and 1997 and the three years in the period ended December 31,
1997, the financial statements of Grindstaff, Inc. at December 31, 1996 and 1997
and the three years in the period ended December 31, 1997, the financial
statements of Day's Chevrolet, Inc. at December 31, 1996 and 1997 and the years
then ended, and the financial statements of Robertson Oldsmobile-Cadillac, Inc.
at December 31, 1996 and 1997 and the years then ended, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing elsewhere
herein, and are included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing. The combined financial
statements of Wade Ford, Inc. and Wade Ford Buford, Inc., at December 31, 1996
and 1997 and the three years in the period ended December 31, 1997 appearing in
this Prospectus and Registration Statement have been audited by Pyke & Pierce,
Certified Public Accountants, LLP, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing. The
financial statements of South Financial Corporation at December 31, 1996 and
1997 and the three years in the period ended December 31, 1997 appearing in this
Prospectus and Registration Statement have been audited by Davis Monk & Company,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, and are included in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the shares of common stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the shares of common stock offered
hereby, reference is made to the Registration Statement, including the exhibits
and schedules filed as part thereof. Statements contained in this Prospectus as
to the contents of any contract or any other documents are not necessarily
complete, and, in each such instance, reference is made to the copy of the
contract or document filed as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference thereto. The
Registration Statement, together with its exhibits and schedules, may be
inspected at the Public Reference Section of the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at 7 World Trade Center, Suite 1300, New York, NY 10048, and
at the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
IL 60661. Copies of all or any part of such materials may be obtained from any
such office upon payment of the fees prescribed by the Commission. The
Commission also maintains a Website (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.

The Company is not currently subject to the periodic reporting and
informational requirements of the Exchange. As a result of the Offering, the
Company will be required to file reports and other information with the
Commission pursuant to the requirements of the Exchange Act. Such reports and
other information may be obtained from the Commission's Public Reference Section
and copied at the public reference facilities and regional offices referred to
above.

122
125

INDEX TO DEFINED TERMS

The following list provides the page on which the following defined terms
used in this Prospectus are defined.

PAGE

Acquisitions................................................ 9
Articles.................................................... 29
Bill Holt Acquisition....................................... 35
Boomershine Automotive...................................... 8
Business Combination Statute................................ 113
Code........................................................ 106
Collision Centers........................................... 36
Collision Note(s)........................................... 36
Collision Centers USA Acquisition........................... 36
Combined Companies.......................................... 51
Commission.................................................. 9
common stock................................................ 3
Company..................................................... Front Cover
CSI......................................................... 6
Day's Chevrolet............................................. 34
Day's Chevrolet Acquisition................................. 34
Disqualifying Disposition................................... 107
Division VP................................................. 82
Employment Agreements....................................... 104
Exchange Act................................................ 32
Executive Manager........................................... 82
Executive Notes............................................. 111
Executive Shares............................................ 111
Fair Price Statute.......................................... 113
FIFO Conversion............................................. 15
Ford........................................................ 16
Franchise Agreement......................................... 16
GBCC........................................................ 29
G.E. Credit Facility........................................ 77
GM.......................................................... 16
GMAC........................................................ 62
Grindstaff Acquisition...................................... 35
Honda....................................................... 20
Hummer...................................................... 4
Incentive Stock Plan........................................ 106
IPO Date.................................................... 107
IPO Price................................................... 107
ISOs........................................................ 106
Jay Note.................................................... 33
Jay Automotive Group Acquisition............................ 33
LIFO Method................................................. 15
Merger...................................................... 33
NADA........................................................ Inside Front Cover
New Floorplan Facility...................................... 51
Nissan...................................................... 16
Non-United States Holder.................................... 117
NSOs........................................................ 106

126

PAGE

Offering.................................................... 3
Price Protection Stock...................................... 113
Registration Statement...................................... 121
Registration Rights Agreement(s)............................ 113
Related Party Leases........................................ 110
Representative.............................................. 120
Robertson Acquisition....................................... 35
ROC......................................................... 35
Saturn...................................................... 18
Securities Act.............................................. 31
South Financial............................................. 7
South Financial Acquisition................................. 36
Sunbelt..................................................... Front Cover
Toyota...................................................... 21
U.S......................................................... 117
U.S. Person................................................. 117
Underwriters................................................ 120
Wade Lease.................................................. 110
Wade Buford Lease........................................... 110
Wade Ford Acquisition....................................... 34
Wade Ford Dealerships....................................... 8
WINCO Partnerships.......................................... 111

127

INDEX TO FINANCIAL STATEMENTS

PAGE
----

SUNBELT AUTOMOTIVE GROUP, INC.
Report of Independent Auditors.............................. F-3
Financial Statements:
Balance Sheet............................................. F-4
Statement of Operations................................... F-5
Statement of Shareholders' Equity (Deficit)............... F-6
Statement of Cash Flows................................... F-7
Notes to Financial Statements............................. F-8
BOOMERSHINE AUTOMOTIVE GROUP, INC.
Report of Independent Auditors.............................. F-12
Consolidated Financial Statements:
Consolidated Balance Sheets............................... F-13
Consolidated Statements of Operations and Changes in
Retained Earnings...................................... F-14
Consolidated Statements of Cash Flows..................... F-15
Notes to Consolidated Financial Statements................ F-16
JAY AUTOMOTIVE GROUP, INC.
Report of Independent Auditors.............................. F-26
Financial Statements:
Balance Sheets............................................ F-27
Statements of Income...................................... F-28
Statements of Cash Flows.................................. F-29
Notes to Financial Statements............................. F-30
GRINDSTAFF, INC.
Report of Independent Auditors.............................. F-37
Financial Statements:
Balance Sheets............................................ F-38
Statements of Operations.................................. F-39
Statements of Stockholders' Equity........................ F-40
Statements of Cash Flows.................................. F-41
Notes to Financial Statements............................. F-42
WADE FORD, INC. AND WADE FORD BUFORD, INC.
Independent Auditor's Report................................ F-48
Combined Financial Statements:
Combined Balance Sheets................................... F-49
Combined Statements of Income and Retained Earnings....... F-50
Combined Statements of Cash Flows......................... F-51
Notes to Combined Financial Statements.................... F-52
ROBERTSON OLDSMOBILE-CADILLAC, INC.
Report of Independent Auditors.............................. F-58
Financial Statements:
Balance Sheets............................................ F-59
Statements of Income and Changes in Retained Earnings..... F-60
Statements of Cash Flows.................................. F-61
Notes to Financial Statements............................. F-62

F-1
128

PAGE
----

DAY'S CHEVROLET, INC.
Report of Independent Auditors.............................. F-68
Financial Statements:
Balance Sheets............................................ F-69
Statements of Income and Changes in Retained Earnings..... F-70
Statements of Cash Flows.................................. F-71
Notes to Financial Statements............................. F-72
SOUTH FINANCIAL CORPORATION
Independent Auditors' Report................................ F-77
Financial Statements:
Balance Sheets............................................ F-78
Statements of Operations and Retained Earnings............ F-79
Statements of Cash Flows.................................. F-80
Notes to Financial Statements............................. F-81

F-2
129

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Sunbelt Automotive Group, Inc.

We have audited the accompanying balance sheet of Sunbelt Automotive Group,
Inc. as of March 31, 1998, and the related statements of operations,
shareholders' equity (deficit) and cash flows for the period from December 17,
1997 (date of inception) through March 31, 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Sunbelt Automotive Group,
Inc. at March 31, 1998, and the results of its operations and its cash flows for
the period from December 17, 1997 (date of inception) through March 31, 1998 in
conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
May 11, 1998

F-3
130

SUNBELT AUTOMOTIVE GROUP, INC.

BALANCE SHEET
MARCH 31, 1998

ASSETS
Cash........................................................ $ 3,000
---------
$ 3,000
=========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable -- affiliates.............................. $ 611,236
---------
Total current liabilities......................... 611,236
Shareholders' equity (deficit):
Common stock, $0.001 par value, 450,000,000 shares
authorized, 6,000 shares issued and outstanding........... 6
Preferred stock, $0.001 par value, 50,000,000 shares
authorized, none issued and outstanding................... --
Additional paid in capital.................................. 2,994
Accumulated deficit......................................... (611,236)
---------
Total shareholders' equity (deficit).............. (608,236)
---------
$ 3,000
=========

See accompanying notes.

F-4
131

SUNBELT AUTOMOTIVE GROUP, INC.

STATEMENT OF OPERATIONS
PERIOD FROM DECEMBER 17, 1997 (DATE OF INCEPTION) THROUGH MARCH 31, 1998

Revenues:
Vehicle sales............................................. $ --
Parts and service......................................... --
Finance, commission and other revenues, net............... --
---------
Cost of sales:
Vehicle sales............................................. --
Parts and service......................................... --
---------
Gross profit................................................ --
Selling, general and administrative......................... 611,236
---------
Loss from operations........................................ (611,236)
Interest expense............................................ --
Interest income............................................. --
Other income, net........................................... --
---------
Loss before income taxes.................................... (611,236)
Income taxes................................................ --
---------
Net loss.................................................... $(611,236)
=========

See accompanying notes.

F-5
132

SUNBELT AUTOMOTIVE GROUP, INC.

STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
PERIOD FROM DECEMBER 17, 1997 (DATE OF INCEPTION) THROUGH MARCH 31, 1998

TOTAL
COMMON STOCK PREFERRED STOCK SHAREHOLDERS'
--------------- --------------- ADDITIONAL PAID ACCUMULATED EQUITY
SHARES AMOUNT SHARES AMOUNT IN CAPITAL DEFICIT (DEFICIT)
------ ------ ------ ------ --------------- ----------- ---------------

December 17, 1997 (date of
inception).............. -- $ -- -- $ -- $ -- $ -- $ --
Issuance of common
stock................... 6,000 6 -- -- 2,994 -- 3,000
Net loss.................. -- -- -- -- -- (611,236) (611,236)
----- ------ ------ ------ ------ --------- ---------
March 31, 1998............ 6,000 $ 6 -- $ -- $2,994 $(611,236) $(608,236)
===== ====== ====== ====== ====== ========= =========

See accompanying notes.

F-6
133

SUNBELT AUTOMOTIVE GROUP, INC.

STATEMENT OF CASH FLOWS
PERIOD FROM DECEMBER 17, 1997 (DATE OF INCEPTION) THROUGH MARCH 31, 1998

OPERATING ACTIVITIES
Net loss.................................................... $(611,236)
Change in accounts payable -- affiliates.................... 611,236
---------
Net cash provided by operating activities................... --
FINANCING ACTIVITIES
Proceeds from issuance of common stock...................... 3,000
---------
Net cash provided by financing activities................... 3,000
---------
Increase in cash............................................ 3,000
Cash at beginning of the period............................. --
---------
Cash at end of the period................................... $ 3,000
=========

See accompanying notes.

F-7
134

SUNBELT AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Sunbelt Automotive Group, Inc. (a Georgia corporation) ("SAG" or the
"Company"), was founded on December 17, 1997 to become a leading operator and
consolidator in the automotive retailing industry. The Company intends to
acquire twenty-one automobile dealerships and related businesses which are
currently owned by eight dealership and other business groups located in
Georgia, North Carolina and Tennessee (the "Founding Groups") (the
"Acquisitions"), complete an initial public offering (the "Offering") of its
common stock and, subsequent to the Offering, continue to acquire, through
merger or purchase, similar companies to geographically expand its operations.

The Company has not conducted any operations, and all activities to date
relate to the Acquisitions. There is no assurance that the Acquisitions
discussed below will be completed and that SAG will be able to generate future
operating revenues. Funding for the Company, to date, has been provided
primarily by Boomershine Automotive Group, Inc. ("BAG"), a member of the
Founding Groups. SAG is dependent upon the Offering to fund the amounts due to
BAG and future operations. In the event that the Offering is not completed, SAG
will pursue alternative sources of funding in order to meet its current
obligations.

Major Suppliers and Franchise Agreements

The Founding Groups purchase substantially all of their new vehicles and
parts inventory from various automobile manufacturers/distributors at the
prevailing prices charged by the manufacturers/distributors to all franchise
dealers. SAG's sales volume subsequent to the Acquisitions could be adversely
impacted by the manufacturers' inability to supply the dealerships with an
adequate supply of popular models or as a result of an unfavorable allocation of
vehicles by the manufacturers.

The dealer franchise agreements contain provisions, which may limit changes
in dealership management and ownership, place certain restrictions on the
dealerships (such as minimum net worth requirements) and which also provide for
termination of the franchise agreement by the manufacturers in certain
instances. Subsequent to the Acquisitions, SAG's ability to acquire additional
franchises from a particular manufacturer may be limited due to certain
restrictions imposed by manufacturers and the acquisition of the Company's stock
by third parties may be limited by the terms of the franchise agreement.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Income Taxes

The Company follows the liability method of accounting for income taxes in
accordance with Statement of Financial Accounting Standards No. 109. Under this
method, deferred income taxes are recorded based upon differences between the
financial reporting and tax basis of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the underlying
assets are received or liabilities are settled.

F-8
135
SUNBELT AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. PROPOSED ACQUISITIONS BY SAG

SAG has signed definitive agreements to acquire seven dealership groups and
related businesses consisting of twenty-one automobile dealerships and related
businesses. The Founding Groups are as follows:

Boomershine Group.......... Consisting of -- Boomershine Pontiac-GMC-Buick,
Inc., Boomershine Automobile Company, Boomershine
Ford, Inc., Boomershine Isuzu, Inc., Boomershine
Services, Inc., Boomershine North Cobb, Inc., d/b/a
Boomershine Mitsubishi and Commerce Credit
Corporation, Thompson Automotive Group, Inc., d/b/a
Boomershine Honda, Boomershine Collision Centers,
Inc., South Financial Corporation

Day Group.................. Consisting of -- Day's Chevrolet, Inc.

Grindstaff Group........... Consisting of -- Grindstaff Chevrolet, Chrysler,
Plymouth, Dodge

Holt Group................. Consisting of -- Hones, Inc. d/b/a Bill Holt Ford
Mercury

Jay Group.................. Consisting of -- Jay Pontiac-Buick-GMC, Inc., Jay
Automotive Group II, Inc. d/b/a Jay Toyota, Jay
Automotive Group V, Inc. d/b/a Jay Mazda

Robertson Group............ Consisting of -- Robertson Oldsmobile-Cadillac,
Inc. d/b/a Moss Robertson Mazda and Moss Robertson
Isuzu

Wade Group................. Consisting of -- Wade Ford, Inc. and Wade Ford
Buford, Inc.

The aggregate consideration that will be paid by SAG to acquire the
Founding Group is approximately $57 million in cash or promissory notes and
4,820,160 shares of SAG common stock (based on an assumed initial public
offering price of $10 per share, the midpoint of the estimated initial public
offering price range also assuming a discount of 10%, which reflects the stocks
trading restrictions). For accounting purposes, Boomershine Group is considered
the accounting acquirer as it will hold the single largest voting interest
subsequent to the Merger with SAG.

The following sets forth the consideration to be paid to each of the
Founding Groups:

RESTRICTED COMMON STOCK
------------------------ PROMISSORY TOTAL
SHARES VALUE NOTES CASH CONSIDERATION
---------- ----- ---------- ---- -------------

Boomershine Group........... 3,800,160 $ -- $ 932,000 $ 5,425,000 $ 6,357,000
Day Group................... 577,500 5,197,500 -- 5,589,000 10,786,500
Grindstaff Group............ -- -- -- 9,128,000 9,128,000
Holt Group.................. -- -- -- 750,000 750,000
Jay Group................... -- -- 4,000,000 12,000,000 16,000,000
Robertson Group............. 40,000 360,000 -- 7,711,000 8,071,000
Wade Group.................. 385,000 3,465,000 -- $12,054,000 $15,519,000
--------- ---------- ---------- ----------- -----------
4,802,660 $9,022,500 $4,932,000 $52,657,000 $66,611,500
========= ========== ========== =========== ===========

The Boomershine Group acquisition will be accounted for as a reverse
acquisition/recapitalization as the Company and the Boomershine Group, the
accounting acquirer, have common ownership. The remaining acquisitions will be
accounted for as purchases with excess of purchase price over fair value of
assets acquired of approximately $37.6 million.

The promissory note issued in connection with the Boomershine Group
acquisition is due on demand and bears an interest rate of 18%, which reflects
the negotiated settlement with the seller to accept a combination of cash and
notes payable versus all cash at closing. The note to be issued in connection
with the Jay Group

F-9
136
SUNBELT AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

acquisition will have a 90 day maturity and bear an interest rate of 8%. The
restricted shares have been valued using the discounted present value method
based on the time the shares are restricted from public sale. In connection with
the Wade Group and the Day Group acquisition, the Company may be required to
issue shares to the former shareholders of Wade Ford and Day's Chevrolet under
price protection provisions, which compensate for any decrease in the value of
shares issued below the issue price for a year, as set forth in the applicable
acquisition agreements. Any additional shares issued in connection with these
price protection provisions will be accounted for as additional purchase price
at the time of issuance.

3. GOVERNMENTAL REGULATION

Substantially all of the Founding Group's facilities are subject to
federal, state and local provisions regulating the discharge of materials into
the environment. Compliance with these provisions has not had, nor does the
Company expect such compliance to have any material effect upon the capital
expenditures, net income, financial condition or competitive position of the
Company. Management believes that its current practices and procedures of the
control and disposition of such wastes comply with applicable federal and state
requirements.

4. STOCK-BASED COMPENSATION PLANS

Stock Option Plan

Effective January 2, 1998, the Company adopted the Sunbelt Automotive
Group, Inc. 1997 & 1998 Incentive Stock Plan (the "Plan"). The Plan provides for
a committee (the "Committee") of non-employee members of the Board of Directors
to grant incentive stock options to any director, officer, employee or
consultant of the Company or any of its subsidiaries. The exercise price of the
options granted under the Plan shall be established by the Committee on or prior
to the date of issuance of the options. Options granted under the Plan vest in
accordance with vesting schedules established by the Committee at the time of
the grant. The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related
Interpretations in accounting for its employee stock options. Under APB 25,
because the exercise price of the Company's employee stock options equals the
market price of the underlying stock on the date of grant, no compensation
expense is recognized.

On January 8, 1998, the Committee granted 425,000 options to certain of the
Company's officers. These options vest over three years and expire after ten
years. At such time, the Committee granted the forgoing options with a $6.27 per
share exercise price, based on a third-party valuation performed on the market
value of the Company's Common Stock on the date of grant. At March 31, 1998, no
options were exercisable and 1,825,000 options were available for future grant
under the Plan.

Pro forma information regarding net earnings is required by FASB Statement
No. 123 "Accounting for Stock-Based Compensation," ("SFAS 123"). SFAS 123 also
requires that the information be determined as if the Company has accounted for
its employee stock options granted under the fair value method of SFAS 123. The
fair value for these options was estimated at the date of grant using a minimum
value option pricing model with the following assumptions: risk-free interest
rate of 6.0%; no anticipated dividends; and a weighted-average expected life of
the option of three years. The weighted average grant date fair value of options
granted during the period using the minimum value option pricing model was
$1.03.

For purposes of SFAS 123 pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options' vesting period. The
Company's pro forma net loss would have been $647,716 for the period from
December 17, 1997 (inception) through March 31, 1998.

F-10
137
SUNBELT AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Warrants

On March 13, 1998, the Company granted warrants to purchase 50,000 shares
of common stock to an outside consultant in consideration for certain financial
and accounting consulting services rendered in connection with the Offering.
These warrants vest over eighteen months and become exercisable upon the
completion of the Offering at an exercise price of $8.00 per share. The warrants
expire, if not exercised within a specified period from the date of grant. The
fair value of the grant using the minimum value method of option pricing was
$31,500 and will be recorded as a cost of the Offering.

5. INCOME TAXES

The following table sets forth the components of the Company's deferred tax
assets as of March 31, 1998 along with a reconciliation of income tax for the
period ended March 31, 1998. The Company has recorded a valuation allowance
against its deferred tax assets as in management's opinion, it is more likely
than not that such amounts may not be realized in future periods.

Benefit at the statutory rate............................... $(207,820)
Increase (decrease) resulting from:
State income tax, net of benefit for federal.............. (24,205)
Valuation allowance....................................... 232,025
---------
$ --
=========
Net operating loss carryforward............................. $ 232,025
Valuation allowance......................................... (232,025)
---------
Net deferred tax assets................................... $ --
=========

6. RELATED PARTY TRANSACTIONS

In conjunction with the formation of the Company, the acquisitions
described in Note 2 and the Offering, Boomershine Group has paid certain
operating expenses including rent, salaries, utilities and administration
expenses amounting to $24,522, $7,500, $162,218 and $416,996, respectively, on
behalf of the Company. The balance at March 31, 1998 of $611,236 is payable on
demand and does not bear interest.

7. SUBSEQUENT EVENTS

In April 1998, the Committee granted 855,000 options to certain of the
Company's officers. At such time, the Committee granted the forgoing options
with an $8.00 per share exercise price, based on a third-party valuation
performed on the market value of the Company's Common Stock on the date of
grant. Additionally, in April 1998, the Committee granted 317,000 options to
certain of the Company's officers and management. The option grant is
conditioned upon the effectiveness of the Offering. The exercise price will be
the initial public offering price for the Company's Common Stock.

Common Stock Issuance

In April 1998, the Board of Directors of the Company approved the issuance
of 249,202 shares of Common Stock to certain of the Company's officers. The
shares were issued at $8.00 per share, the fair value at the date of issuance.
The consideration for the Common Stock issuance were notes payable to the
Company by the officers. The notes payable are due in five years and bear
interest of 8% per year. The notes will be reflected as a reduction of
shareholder's equity until repaid in full.

F-11
138

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Boomershine Automotive Group, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Boomershine
Automotive Group, Inc. and Subsidiaries as of June 30, 1996 and 1997, and the
related consolidated statements of operations and changes in retained earnings
and cash flows for each of the three years in the period ended June 30, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Boomershine
Automotive Group, Inc. and Subsidiaries at June 30, 1996 and 1997, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended June 30, 1997 in conformity with generally
accepted accounting principles.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
January 30, 1998

F-12
139

BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................. $ 4,998,408 $ 4,556,291 $ 4,717,153
Accounts receivable, net.............................. 7,701,302 5,267,834 7,882,840
Finance receivables, net.............................. -- -- 13,495,149
Inventories........................................... 50,231,288 39,553,471 47,732,587
Prepaid expenses and other current assets............. 341,774 259,289 2,256,415
Refundable income taxes............................... 270,920 454,459 --
Deferred income taxes................................. 766,591 512,945 1,459,134
----------- ----------- -----------
Total current assets.......................... 64,310,283 50,604,289 77,543,278
Property and equipment, net............................. 4,187,891 3,962,564 4,412,546
Deferred income taxes................................... 101,461 54,303 16,887
Intangible assets, net.................................. 784,643 718,738 6,537,311
Other assets............................................ 264,376 332,171 438,946
----------- ----------- -----------
$69,648,654 $55,672,065 $88,948,968
=========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Floor plan notes payable.............................. $49,439,711 $36,798,078 $49,917,664
Senior debt........................................... -- -- 11,470,680
Notes payable -- affiliates........................... 3,457,215 3,299,926 7,254,948
Accrued liabilities................................... 4,406,168 2,905,053 2,593,850
Accounts payable...................................... 1,320,431 1,677,447 2,359,021
Current maturities of long-term debt.................. 98,333 38,333 1,921,073
Deferred income taxes................................. -- -- 959,374
Dealer finance reserves............................... -- -- 306,420
----------- ----------- -----------
Total current liabilities..................... 58,721,858 44,718,837 76,783,030
Long-term debt, less current maturities................. 523,889 482,362 360,050
Income taxes payable.................................... 2,060,440 2,187,910 2,208,701
Other liabilities....................................... 283,803 309,719 356,850
Stockholders' equity:
Class A voting common stock, no par value, 500,000
shares authorized, 3,600, 3,600 and 72,000 shares
issued and outstanding, respectively............... 198,686 198,686 3,973,704
Class B non-voting common stock, no par value, 500,000
shares authorized, 68,400, 68,400 and 0 shares
issued and outstanding, respectively............... 3,775,018 3,775,018 --
Retained earnings..................................... 4,084,960 3,999,533 5,266,633
----------- ----------- -----------
Total stockholders' equity.................... 8,058,664 7,973,237 9,240,337
----------- ----------- -----------
$69,648,654 $55,672,065 $88,948,968
=========== =========== ===========

See accompanying notes.

F-13
140

BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND CHANGES IN RETAINED EARNINGS

NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
------------------------------------------ ---------------------------
1995 1996 1997 1997 1998
------------ ------------ ------------ ------------ ------------
(UNAUDITED)

Revenues:
Vehicle sales...................... $214,001,989 $230,851,161 $214,435,923 $160,556,742 $152,856,735
Parts and service.................. 19,223,080 23,763,491 24,636,720 17,688,698 19,108,036
Finance, commission and other
revenues......................... 5,094,956 8,278,826 8,372,554 6,514,094 6,701,569
------------ ------------ ------------ ------------ ------------
238,320,025 262,893,478 247,445,197 184,759,534 178,666,340
Cost of sales:
Vehicle sales...................... 203,591,143 220,215,226 204,301,660 153,377,193 145,801,173
Parts and service.................. 10,816,132 11,553,747 15,018,056 10,168,079 11,225,178
Finance, commissions and other
revenues......................... 1,239,333 4,059,749 3,032,902 2,158,702 1,302,659
------------ ------------ ------------ ------------ ------------
215,646,608 235,828,722 222,352,618 165,703,974 158,329,010
------------ ------------ ------------ ------------ ------------
Gross profit......................... 22,673,417 27,064,756 25,092,579 19,055,560 20,337,330
Selling, general and
administrative..................... 20,332,772 24,769,911 23,151,867 17,356,773 17,307,749
------------ ------------ ------------ ------------ ------------
Income from operations............... 2,340,645 2,294,845 1,940,712 1,698,787 3,029,581
Interest expense..................... 1,436,394 1,774,285 2,230,144 1,408,795 1,543,663
Interest income...................... 218,607 181,318 119,706 184,142 247,428
Other income (expense), net.......... 60,606 12,585 44,303 (80,156) (68,215)
------------ ------------ ------------ ------------ ------------
Income (loss) before taxes........... 1,183,464 714,463 (125,423) 393,978 1,665,131
Income tax (expense) benefit......... (448,842) (212,269) 39,996 (118,993) (398,031)
------------ ------------ ------------ ------------ ------------
Net income (loss)........... 734,622 502,194 (85,427) 274,985 1,267,100
Retained earnings at beginning of
period............................. 2,848,144 3,582,766 4,084,960 4,084,960 3,999,533
------------ ------------ ------------ ------------ ------------
Retained earnings at end of period... $ 3,582,766 $ 4,084,960 $ 3,999,533 $ 4,359,945 $ 5,266,633
============ ============ ============ ============ ============

See accompanying notes.

F-14
141

BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
----------------------------------------- -------------------------
1995 1996 1997 1997 1998
------------ ----------- ------------ ----------- -----------
(UNAUDITED)

OPERATING ACTIVITIES
Net income (loss)....................... $ 734,622 $ 502,194 $ (85,427) $ 274,985 $ 1,267,100
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization......... 382,828 556,034 823,575 608,758 644,809
Amortization of intangible assets..... 22,788 44,223 65,905 50,679 119,275
Deferred income taxes................. (386,533) (82,510) 300,804 225,606 (215,885)
Loss on sale of property and
equipment........................... 187 2,747 14,268 -- --
Changes in assets and liabilities:
Accounts receivable, net............ (4,747,808) 2,140,834 2,433,468 2,295,454 (2,173,947)
Finance receivables................. -- -- -- -- (648,377)
Inventories......................... (19,874,742) (1,741,471) 10,677,817 8,215,777 (8,105,375)
Prepaid expenses and other assets... 123,684 2,520 82,485 56,623 (1,969,474)
Floor plan notes payable............ 25,160,314 2,823,261 (12,641,633) (8,096,269) 13,119,586
Accounts payable and accrued
liabilities....................... 2,257,945 (283,535) (1,144,099) (2,315,385) 28,230
Dealer finance reserves............. -- -- -- -- (420,258)
Income taxes........................ 410,312 74,894 (56,069) (106,613) 475,250
Other assets and liabilities........ 113,541 (525,822) (41,879) (124,800) (59,644)
------------ ----------- ------------ ----------- -----------
Net cash provided by operating
activities................... 4,197,138 3,513,369 429,215 1,084,815 2,061,290
INVESTING ACTIVITIES
Purchases of property and equipment..... (1,715,385) (2,450,747) (808,516) (1,208,023) (697,070)
Cost of acquisitions, net of cash
acquired.............................. (1,281,376) (2,107,458) -- -- (5,360,924)
Proceeds on disposal of property and
equipment............................. 256,413 319,913 196,000 380,494 --
------------ ----------- ------------ ----------- -----------
Net cash used in investing
activities................... (2,740,348) (4,238,292) (612,516) (827,529) (6,057,994)
FINANCING ACTIVITIES
Principal payments on notes payable --
affiliates............................ (1,477,838) (1,522,891) (1,357,910) (1,055,132) (1,112,253)
Borrowings on notes
payable -- affiliates................. 1,736,902 2,214,844 1,200,621 978,863 5,076,067
Borrowings of long-term debt............ 600,000 -- -- -- 219,308
Principal payments on long-term debt.... (60,000) (682,778) (101,527) (92,492) (25,556)
------------ ----------- ------------ ----------- -----------
Net cash provided by (used in)
financing activities......... 799,064 9,175 (258,816) (168,761) 4,157,566
------------ ----------- ------------ ----------- -----------
Change in cash and cash equivalents..... 2,255,854 (715,748) (442,117) 88,525 160,862
Cash and cash equivalents at beginning
of the period......................... 3,458,302 5,714,156 4,998,408 4,998,408 4,556,291
------------ ----------- ------------ ----------- -----------
Cash and cash equivalents at end of the
period................................ $ 5,714,156 $ 4,998,408 $ 4,556,291 $ 5,086,933 $ 4,717,153
============ =========== ============ =========== ===========

See accompanying notes.

F-15
142

BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1997

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF BUSINESS

Boomershine Automotive Group, Inc. and Subsidiaries (the Company) is
principally engaged in the business of selling and servicing new and used
vehicles. The Company operates eight dealerships in Metropolitan Atlanta
consisting of Ford, Pontiac-GMC, Nissan, Buick, Honda, Mitsubishi, Isuzu, and
Hummer.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Boomershine
Automotive Group, Inc., (the Company), and its wholly-owned subsidiaries:
Boomershine Pontiac-GMC Truck, Inc., Boomershine Automobile Company (a Georgia
Corporation), Boomershine Ford, Inc., Boomershine Isuzu, Inc., Boomershine
Services, Inc., Boomershine North Cobb, Inc., d/b/a Boomershine Mitsubishi and
Commerce Credit Corporation, and its 86% owned subsidiary, Thompson Automotive
Group, Inc., d/b/a Boomershine Honda. The minority stockholders' interest in the
net assets of the 86% owned subsidiary is included in the consolidated balance
sheet, and the minority stockholders' interest in the subsidiary's net loss has
been considered in computing the consolidated net loss. All significant
intercompany accounts and transactions have been eliminated in consolidation.

DEALERSHIP ACQUISITIONS

During 1995, the Company acquired a Honda dealership in Cartersville,
Georgia that included new vehicle inventories, parts and accessories and certain
other assets for $1,281,376. During 1996, the Company acquired a Buick
dealership in Atlanta, Georgia that included vehicle inventories and certain
other assets for $2,107,458 and the issuance of a note payable of $575,000 due
in 1999. The acquisitions have been accounted for using the purchase method of
accounting. The accompanying consolidated financial statements include the
results of the acquired dealerships' operations from the dates of acquisition.
Pro forma information is not provided because the impact of the acquisitions
does not have a material effect on the Company's results of operations, cash
flows or financial position.

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, contracts in transit
pertaining to the sale of vehicles, and all highly liquid investments with an
original maturity of three months or less at the date of purchase.

INVENTORIES

In connection with the Offering, the Company converted from the last-in,
first-out method (the "LIFO Method") of inventory accounting to the specific
identification method, for its inventories of new and used vehicles. In
accordance with Accounting Principles Board Opinion No. 20, "Accounting
Changes", the accompanying financial statements and related notes have been
retroactively restated to reflect that change in accounting principle.
Accordingly, inventories of new and used vehicles are stated at the lower of
specific cost

F-16
143
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
or market. Inventories of parts and accessories are stated at the lower of
first-in, first-out ("FIFO") cost or market.

The new method of accounting for inventories of new and used vehicles was
adopted to provide a better matching of revenues and expenses and to conform
with the predominant industry practice for automobile dealerships that are
publicly-held. The effect of the accounting change on net income (loss) as
previously reported is as follows:

YEAR ENDED JUNE 30,
--------------------------------
1995 1996 1997
-------- --------- ---------

Net income (loss) on the LIFO Method................. $478,281 $(316,618) $(357,690)
Adjustment for effect of a change in accounting
principle that is applied retroactively............ 256,341 818,812 272,263
-------- --------- ---------
Net income (loss) as adjusted.............. $734,622 $ 502,194 $ (85,427)
======== ========= =========

REVENUE RECOGNITION

Finance fees represent revenue earned by the Company for notes placed with
financial institutions in connection with customer vehicle financing. Finance
fees are recognized in income upon acceptance of the credit by the financial
institution. Insurance income represents commissions earned on credit life,
accident and disability insurance sold in connection with a vehicle on behalf of
third-party insurance companies. Insurance and warranty commissions are
recognized in income upon customer acceptance of the contract terms as evidenced
by contract execution.

The Company is charged back a portion of fees and commissions earned on
finance or insurance contracts if the customer terminates a contract prior to
its scheduled maturity. The estimated allowance for these chargebacks is based
upon the Company's historical experience for prepayments or defaults on the
finance and insurance contracts.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation.
Depreciation is provided predominately on the straight-line method over the
estimated useful lives of the assets. The ranges of estimated useful lives are
as follows:

Buildings.................................................. 15 - 20 years
Furniture and fixtures..................................... 5 - 7 years
Leasehold improvements..................................... 5 - 18 years
Machinery and shop equipment............................... 5 - 12 years
Rental cars and company vehicles........................... 3 years

INTANGIBLES

Intangibles consist principally of goodwill, which represents the excess of
cost over assigned fair market value of dealerships acquired and franchise
rights and are being amortized on a straight-line basis over their

F-17
144
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
estimated useful lives, not exceeding 40 years. Accumulated amortization was
$317,712 and $383,617 at June 30, 1996 and 1997, respectively. The carrying
amount of intangibles and other long lived assets are reviewed if facts and
circumstances suggest that it may be impaired. If this review indicates that
these assets will not be recoverable, as determined based on the estimated
undiscounted cash flows of the entity acquired over the remaining amortization
period, the carrying amount of the asset is reduced by the estimated shortfall
of the discounted cash flows.

MAJOR SUPPLIER

The Company purchases substantially all of its new vehicles and parts
inventory from automobile manufacturers/distributors at the prevailing prices
charged by the manufacturers/distributors to all franchise dealers. The Company
enters into agreements ("Dealer Agreements") with each manufacturer. The Dealer
Agreements generally limit the location of the dealership and include
manufacturer approval rights over changes in dealership management and
ownership. A manufacturer is also entitled to terminate the Dealer Agreement if
the dealership is in material breach of its terms.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of contracts in transit and
accounts receivable. Also, at times, cash deposits in banks exceed the Federal
Deposit Insurance Corporation insurance limit. Contracts in transit are for
funds received shortly after balance sheet date from contracts financed with
financial institutions. Trade receivables principally result from extending
short-term credit to a large number of customers and other automotive dealers
located in the North Georgia area. Finance companies receivables are commissions
on credit contracts of customers. Receivables also result from transactions with
automotive manufacturers. Although the Company is directly affected by the
economic conditions in the automotive industry, financial institutions, banks,
its customers and the general economy of the Atlanta and North Georgia area,
management does not believe significant credit risk exists.

ADVERTISING

The Company expenses the cost of advertising as incurred. Advertising
expense was approximately $1,900,000, $2,700,000 and $2,538,000 for the years
ended June 30, 1995, 1996 and 1997, respectively.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company considers the carrying amounts of significant classes of
financial instruments on the consolidated balance sheet, including cash and
contracts in transit, notes payable and long-term debt to be reasonable
estimates of fair value. Fair value of the Company's debt was estimated using
discounted cash flow analysis, based on the Company's current incremental
borrowing rates for similar types of arrangements.

INTERIM FINANCIAL STATEMENTS

The accompanying unaudited financial statements as of March 31, 1998 and
for the nine months ended March 31, 1997 and 1998 have been prepared on
substantially the same basis as the audited financial statements and include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the financial information set forth therein.

F-18
145
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at June 30, 1996 and 1997:

JUNE 30,
-----------------------
1996 1997
---------- ----------

Parts, service and wholesale................................ $4,929,130 $3,435,110
Factory..................................................... 2,079,487 1,756,567
Finance companies........................................... 696,471 233,532
Employees................................................... 122,553 19,404
Other....................................................... 6,882 53,862
---------- ----------
7,834,523 5,498,475
Less allowance for doubtful accounts........................ 133,221 230,641
---------- ----------
$7,701,302 $5,267,834
========== ==========

3. INVENTORIES

Inventories consist of the following at June 30, 1996 and 1997:

JUNE 30,
-------------------------
1996 1997
----------- -----------

New vehicles................................................ $41,240,836 $32,942,563
Used vehicles............................................... 7,204,193 4,994,574
Parts, accessories and other................................ 1,786,259 1,616,334
----------- -----------
$50,231,288 $39,553,471
=========== ===========

4. PROPERTY AND EQUIPMENT

A summary of property and equipment is as follows as of June 30, 1996 and
1997:

JUNE 30,
-----------------------
1996 1997
---------- ----------

Buildings................................................... $ 904,954 $1,005,885
Leasehold improvements...................................... 1,116,411 1,169,026
Machinery and shop equipment................................ 2,257,615 2,620,613
Furniture and fixtures...................................... 1,302,609 1,481,849
Rental cars and company vehicles............................ 1,383,665 1,010,845
---------- ----------
6,965,254 7,288,218
Less accumulated depreciation and amortization.............. 2,777,363 3,325,654
---------- ----------
$4,187,891 $3,962,564
========== ==========

F-19
146
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. FLOOR PLAN NOTES PAYABLE, SENIOR DEBT, AND NOTES PAYABLE -- AFFILIATES

A summary of notes payable is as follows:

JUNE 30,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)

Floor plan notes payable........................ $49,439,711 $36,798,078 $49,917,664
Senior debt, secured, bearing interest at LIBOR
plus 5.6% matures September 1998.............. -- -- 11,470,680
Notes payable -- stockholders; bearing interest
at prime rate; due on demand; unsecured....... 2,242,825 2,161,103 1,584,238
Notes payable -- employees; bearing interest at
prime rate; due on demand; unsecured.......... 630,336 458,384 338,404
Notes payable -- WINCO Partnerships; bearing
interest at prime rate; due on demand;
unsecured..................................... 584,054 680,439 832,306
Notes payable -- WINCO Partnerships; bearing
interest at prime; due on July 1998;
unsecured..................................... -- -- 4,500,000
----------- ----------- -----------
3,457,215 3,299,926 7,254,948
----------- ----------- -----------
$52,896,926 $40,098,004 $68,643,292
=========== =========== ===========

Floor plan notes payable consists of notes with financial institutions. The
floor plan notes are secured by certain new and used vehicles. The floor plan
arrangements permit the Company to borrow up to approximately $49,500,000 and
$43,250,000 in 1996 and 1997, respectively, restricted by new and used vehicle
levels. The notes are generally due within ten days of the vehicle being sold or
after the vehicle has been in inventory for one year for new vehicles and after
three months for used vehicles. The notes bear interest based on contractual
rates, which ranged from approximately 7.5% to 8.3% and 7.1% to 8.0% at June 30,
1996 and 1997, respectively.

Senior debt at March 31, 1998, is comprised of a secured revolving note
payable to General Electric Capital Corporation (G.E. Capital) assumed in
connection with the purchase of South Financial Corporation (SFC). The G.E.
Capital revolving note is secured by finance contracts assigned to G.E. Capital
as well as all other assets. All contract collections are remitted directly to
G.E. Capital and applied towards the outstanding balance. Under the loan and
security agreement, SFC may borrow up to $15,000,000 by obtaining advances of
90% on SFC's net investment in all eligible contracts. The loan matures
September 1998, with provisions for automatic annual renewals unless terminated
by either party. The loan bears interest at LIBOR plus 5.6%. As of March 31,
1998, SFC was not in compliance with its credit agreement with G.E. Capital
Corporation, however; certain financial ratio covenants have been waived by G.E.
Capital for the period December 31, 1997 through September 30, 1998, which
allows SFC to be in compliance with its credit agreement. Subsequent to March
31, 1998, SFC cured its debt covenant violation.

WINCO I, L.P., WINCO II, L.P. and WINCO III, L.P. (collectively, the "WINCO
Partnerships") are partnerships controlled by Walter M. Boomershine, Jr. and
owned by Walter M. Boomershine, Jr. and his family. Walter M. Boomershine, Jr.
and his family own 100% of the Company. This note payable, which matures on July
1998, was made in connection with the acquisition of South Financial Corporation
and carries an interest at prime as announced by NationsBank, N.A. from time to
time. The Company has the option to refinance the loan for an additional term of
five years subsequent to said maturity date, at an interest rate of 8% per
annum, using a 20-year amortization.

F-20
147
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. ACCRUED LIABILITIES

Accrued liabilities consist of the following at June 30, 1996 and 1997:

JUNE 30,
-----------------------
1996 1997
---------- ----------

Salaries, wages, bonus and vacation......................... $1,188,070 $ 608,286
Finance reserve............................................. 434,627 538,800
Accrued taxes............................................... 586,035 397,284
Accrued interest............................................ 572,103 284,107
Other accrued liabilities................................... 1,625,333 1,076,576
---------- ----------
$4,406,168 $2,905,053
========== ==========

7. LONG-TERM DEBT

A summary of long-term debt as of June 30, 1996 and 1997 is as follows:

JUNE 30,
------------------- MARCH 31,
1996 1997 1998
-------- -------- -----------
(UNAUDITED)

Note payable -- Jim Peters; bearing interest at 18%,
due on demand, unsecured............................ $ -- $ -- $1,013,442
Note payable -- Mobile Loan Co.; bearing interest at
LIBOR plus 2%, payable monthly, balance due February
1999, unsecured..................................... 557,222 520,695 492,336
Note payable -- CIT Group; bearing interest at 11%,
payable monthly, balance due November 2001,
secured............................................. -- -- 483,476
Note payable -- Investors Equity Corporation; bearing
interest at 18%, payable monthly, balance due
December 2000, unsecured............................ -- -- 291,869
Other................................................. 65,000 -- --
-------- -------- ----------
622,222 520,695 2,281,123
Less current maturities of long-term debt............. 98,333 38,333 1,921,073
-------- -------- ----------
$523,889 $482,362 $ 360,050
======== ======== ==========

The note payable to Jim Peters, former President and owner of Collision
Centers, Inc., was made in connection with the purchase of the Collision
Centers, Inc. See further discussion of the Collision Center acquisition in Note
14. The note payable to Mobile Loan Company was made in connection with the
purchase of the Buick dealership in 1996. In December 1997, the Company signed a
promissory note to fund the lease of certain equipment. The note to Investors
Equity Corporation was assumed in connection with the purchase of South
Financial Corporation in January 1998.

During 1995, 1996 and 1997, total cash paid for interest on notes payable
and long-term debt was approximately $1,770,000, $1,400,000 and $2,230,000
respectively.

8. INCOME TAXES

The Company files consolidated Federal and State income tax returns with
its subsidiaries. The current income tax provision represents the amount of
income taxes paid or payable for the year. The deferred income

F-21
148
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. INCOME TAXES (CONTINUED)
tax provision represents the change in deferred tax liabilities and assets.
Significant components of the provisions for income taxes are as follows for the
year ended June 30, 1995, 1996 and 1997, respectively:

JUNE 30,
---------------------------------
1995 1996 1997
--------- --------- ---------

Current income tax (expense) benefit:
Federal........................................... $(703,031) $(244,764) $ 287,179
State............................................. (132,344) (50,015) 53,621
Deferred income tax benefit (expense)............... 386,533 82,510 (300,804)
--------- --------- ---------
Total provision for income tax (expense)
benefit................................. $(448,842) $(212,269) $ 39,996
========= ========= =========

The Company utilized net operating loss carrybacks for Federal and State
income tax purposes of approximately $1,234,000 during the year ended June 30,
1997. The Company paid income taxes of $450,000 and $253,667 for the years ended
June 30, 1995 and 1996, respectively. The Company received refunds of income
taxes of approximately $443,000 in 1997.

A reconciliation of the expected income tax benefit (expense) at the
statutory federal rate to the Company's actual income tax provision for the year
ended June 30, 1995, 1996 and 1997, respectively follows:

JUNE 30,
-------------------------------
1995 1996 1997
--------- --------- -------

Federal statutory (expense) benefit................... $(402,378) $(242,917) $42,644
State (expense) benefit, net of federal (expense)
benefit............................................. (47,327) (28,571) 5,017
Other................................................. 863 59,219 (7,665)
--------- --------- -------
$(448,842) $(212,269) $39,996
========= ========= =======

Deferred income taxes are recognized for tax consequences of temporary
differences between the financial and tax bases of existing assets and
liabilities by applying enacted statutory tax rates to such differences.
Significant components of the Company's deferred tax liabilities and assets as
of June 30, 1996 and 1997 are as follows:

JUNE 30,
---------------------
1996 1997
---------- --------

Deferred tax assets:
Deferred compensation..................................... $ 69,675 $ 82,918
Intangibles............................................... 75,499 70,431
Accrued liabilities....................................... 620,379 211,185
Bad debt reserve.......................................... 50,624 87,643
Finance reserves.......................................... 155,345 204,744
Inventories............................................... 41,236 87,197
Other..................................................... 31,996 36,639
---------- --------
Total deferred tax assets......................... 1,044,754 780,757
Deferred tax liabilities:
Property and equipment.................................... 43,713 99,048
Other..................................................... 132,989 114,461
---------- --------
Total deferred tax liabilities.................... 176,702 213,509
---------- --------
Total net deferred tax assets..................... $ 868,052 $567,248
========== ========

F-22
149
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. INCOME TAXES (CONTINUED)
Deferred tax assets are recognized for the tax benefit of deducting timing
differences. Valuation allowances are recognized on these assets if it is
believed that some or all of the deferred tax assets will not be realized.
Management believes the majority of deferred tax assets will be realized because
of the available taxable income in carryback years and anticipated future
taxable income resulting from operations; therefore, no valuation allowance was
considered necessary.

A change to the specific identification cost method from the LIFO Method
for new and used vehicle inventories resulted in an additional income tax
liability. This liability was recorded as $2,060,440 and $2,187,910 at June 30,
1996 and 1997, respectively and is payable over a four year period beginning in
September 1998.

9. MINORITY STOCKHOLDERS' INTEREST IN CONSOLIDATED SUBSIDIARY

A related party to the Company's principal owner owns 100,000 shares (14%)
non-voting common stock of the Company's subsidiary, Thompson Automotive Group,
Inc., d/b/a Boomershine Honda. The capital stock of the subsidiary has no par
value. The book value of this stock was $95,447 and $91,514 and at June 30, 1996
and 1997, respectively. The minority stockholder's interest in the subsidiary's
net income (loss) was not significant in the years ended June 30, 1995, 1996 and
1997.

10. CONTINGENCIES

At June 30, 1997, there were certain lawsuits and claims pending against
the Company. In the opinion of management, the ultimate liabilities, if any,
resulting from such lawsuits and claims, will not materially affect the
operating results liquidity or the financial position of the Company.

11. COMMITMENTS AND TRANSACTIONS WITH RELATED PARTIES

The Company is obligated to WINCO I, L.P., a related party, under certain
non-cancelable leases. These leases, which cover the lease of certain buildings,
land and equipment provide for the following payments:

1998........................................................ $ 1,642,188
1999........................................................ 1,642,188
2000........................................................ 1,642,188
2001........................................................ 1,664,188
2002........................................................ 1,694,188
Later years................................................. 15,897,302
-----------
Total minimum payments............................ $24,182,242
===========

Total rent expense for the years ended June 30, 1995, 1996 and 1997 was
$1,188,538, $1,288,465 and $1,588,045, respectively. Rent expense includes
$1,095,000, $1,288,465 and $1,578,245 for leases with related parties for the
years ended June 30, 1995, 1996 and 1997, respectively.

12. GOVERNMENTAL REGULATION

Substantially all of the Company's facilities are subject to federal, state
and local provisions regulating the discharge of materials into the environment.
Compliance with these provisions has not had, nor does the Company expect such
compliance to have any material effect upon the capital expenditures, net
income, financial condition or competitive position of the Company. Management
believes that its current practices and procedures of the control and
disposition of such wastes comply with applicable federal and state
requirements.

F-23
150
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. EMPLOYEE BENEFIT PLAN

The Company has an employee savings plan under Section 401(k) of the
Internal Revenue Code. This plan covers substantially all full time employees.
The Company matches the employees' contributions of up to four percent of
compensation at the rate of $0.50 per $1.00 on the first 2% of compensation
contributed and $0.25 per $1.00 on the next 2% of compensation contributed. The
Company's contributions generally vest over 5 years. The amount charged against
income for the Company's contributions to the plan for the years ended June 30,
1995, 1996 and 1997 was $102,752, $132,612 and $144,737, respectively.

14. SUBSEQUENT EVENTS

Subsequent to June 30, 1997, the Company canceled and retired all of its
Class B non-voting common stock and reissued the same number of shares of Class
A voting common stock. As a result of the cancellation and reissuance, as of
March 31, 1998, there were 72,000 shares of Class A voting common stock, no par
value, issued and outstanding and no Class B common stock issued and
outstanding.

In December 1997, the Company entered into a lease agreement related to
certain equipment. The lease, which was accounted for as a capital lease,
resulted in the recording of a note payable of approximately $535,000, of which
approximately $123,000 is due in fiscal 1998.

In December 1997, the Company purchased an automobile repair business that
consisted of three repair centers in the Metropolitan Atlanta area. The
acquisition included the purchase of certain assets and assumption of
liabilities, the payment of $775,000 and the issuance of notes payable of
approximately $932,000 due in 1998. The acquisition was accounted for as a
purchase. The excess purchase price over fair value of assets acquired of
approximately $1.9 million was allocated to goodwill to be amortized over 40
years.

In January 1998, the Company purchased South Financial Corporation, a
finance company with operations in Florida, North Carolina and Tennessee. The
primary business of South Financial Corporation is to purchase from retail
automobile dealers sales contracts of substandard credit arising from the sale
of used automobiles. The acquisition included the purchase of certain assets and
assumption of liabilities and the payment of $4,650,000. The acquisition was
accounted for as a purchase. The excess purchase price over fair value of assets
acquired of approximately $4.0 million was allocated to goodwill to be amortized
over 40 years. In order to finance the South Financial Corporation acquisition
the Company borrowed $4.5 million from WINCO I, L.P. The promissory note is due
July 1998 and bears interest at the prime rate as announced by NationsBank. The
Company has the option to refinance the note for five years at an interest rate
of 8%.

The results of operations for these acquisitions have been included from
the date of acquisition through March 31, 1998 in the accompanying Unaudited
Consolidated Statement of Operations. The following pro forma financial data is
presented as if the acquisitions had been acquired on July 1, 1996 and July 1,
1997, respectively:

NINE MONTHS ENDED MARCH 31,
----------------------------
1997 1998
------------ ------------

Revenues.............................................. $189,455,266 $181,223,681
Net income(loss)...................................... $ (417,336) $ 229,296

The pro forma information presented above is not necessarily indicative of
the operating results that would have occurred had the acquisitions been
acquired on July 1, 1996 and July 1, 1997. These results are also not
necessarily indicative of future operations.

In January 1998, the Board of Directors approved the Company to exchange
shares of its common stock with Sunbelt Automotive Group, Inc. ("Sunbelt
Automotive"), a related company through common ownership, in connection with the
filing of a registration statement with the Securities and Exchange

F-24
151
BOOMERSHINE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSEQUENT EVENTS (CONTINUED)
Commission. Contemporaneously with the offering by Sunbelt Automotive, the
Company will merge with and into Sunbelt Automotive, which will result in each
of the Company's dealerships and operating divisions becoming direct or indirect
wholly-owned subsidiaries of Sunbelt Automotive. The Company's shareholders will
receive approximately 3,800,000 shares of Sunbelt Automotive common stock in
exchange for the issued and outstanding common stock of the Company. This
transaction will be accounted for as a reverse acquisition/recapitalization.

F-25
152

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Jay Automotive Group, Inc.

We have audited the accompanying balance sheets of Jay Automotive Group,
Inc. (as defined in Note 1, Basis of Presentation) as of December 31, 1996 and
1997, and the related statements of income and cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are the
responsibility of the management of Jay Automotive Group, Inc. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Jay Automotive Group, Inc.
at December 31, 1996 and 1997, and results of their operations and their cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
March 23, 1998

F-26
153

JAY AUTOMOTIVE GROUP, INC.

BALANCE SHEETS

DECEMBER 31,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................. $ 2,406,058 $ 3,758,389 $ 4,072,647
Accounts receivable................................... 1,049,224 1,053,218 1,318,431
Notes receivable...................................... 227,359 297,968 382,447
Inventories -- Notes 5 and 7.......................... 15,290,708 12,022,640 17,317,178
Other current assets.................................. 138,060 381,181 73,353
----------- ----------- -----------
Total current assets.......................... 19,111,409 17,513,396 23,164,056
Property and equipment, net -- Note 6................... 1,013,309 889,254 808,561
Intangible assets, net -- Note 3........................ 338,333 318,333 313,333
Other assets............................................ 81,437 16,554 65,873
----------- ----------- -----------
$20,544,488 $18,737,537 $24,351,823
=========== =========== ===========

LIABILITIES AND OWNER'S EQUITY
Current liabilities:
Floor plan notes payable -- Note 7.................... $12,375,365 $ 9,019,181 $13,707,401
Accrued liabilities................................... 453,029 693,976 1,119,483
Accounts payable...................................... 905,766 896,598 1,205,917
Current maturities of long-term debt.................. 60,000 60,000 60,000
----------- ----------- -----------
Total current liabilities..................... 13,794,160 10,669,755 16,092,801
Long-term debt, less current maturities -- Note 7....... 185,900 131,076 118,585
Commitments and contingencies -- Notes 3, 7, 10 and 11
Total owner's equity -- Notes 4 and 9......... 6,564,428 7,936,706 8,140,437
----------- ----------- -----------
$20,544,488 $18,737,537 $24,351,823
=========== =========== ===========

See accompanying notes.

F-27
154

JAY AUTOMOTIVE GROUP, INC.

STATEMENTS OF INCOME

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------- -------------------------
1995 1996 1997 1997 1998
----------- ----------- ------------ ----------- -----------
(UNAUDITED)

Revenues:
Vehicle sales................ $68,752,615 $82,686,950 $ 86,461,125 $21,209,882 $20,655,917
Parts and service............ 9,008,736 10,635,601 11,869,480 3,218,434 3,206,583
Finance, commission and other
revenues.................. 2,189,639 2,723,542 2,913,304 948,006 902,144
----------- ----------- ------------ ----------- -----------
79,950,990 96,046,093 101,243,909 25,376,322 24,764,644
Cost of sales:
Vehicle sales................ 64,383,162 77,264,532 80,887,066 19,954,073 19,419,134
Parts and service............ 5,751,659 6,841,136 7,656,492 1,936,977 1,992,921
Finance, commission and other
revenues.................. 468,642 657,382 729,487 195,646 257,431
----------- ----------- ------------ ----------- -----------
70,603,463 84,763,050 89,273,045 22,086,696 21,669,486
----------- ----------- ------------ ----------- -----------
Gross profit................... 9,347,527 11,283,043 11,970,864 3,289,626 3,095,158
Selling, general and
administrative............... 7,134,069 8,952,606 9,588,307 2,411,293 2,537,573
----------- ----------- ------------ ----------- -----------
Income from operations......... 2,213,458 2,330,437 2,382,557 878,333 557,585
Interest expense............. 447,932 397,007 361,555 102,282 32,433
Interest income.............. 88,687 96,291 101,104 23,078 25,319
----------- ----------- ------------ ----------- -----------
Income before income taxes..... 1,854,213 2,029,721 2,122,106 799,129 550,471
Income taxes................... 702,792 774,742 806,000 303,700 209,000
----------- ----------- ------------ ----------- -----------
Net income........... $ 1,151,421 $ 1,254,979 $ 1,316,106 $ 495,429 $ 341,471
=========== =========== ============ =========== ===========

See accompanying notes.

F-28
155

JAY AUTOMOTIVE GROUP, INC.

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- ------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ---------- -----------
(UNAUDITED)

OPERATING ACTIVITIES
Net income....................... $ 1,151,421 $ 1,254,979 $ 1,316,106 $ 495,429 $ 341,471
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization................ 164,968 251,965 218,554 60,373 64,941
Changes in current assets and
liabilities:
Accounts receivable......... (209,094) (109,842) (3,994) 252,394 (265,213)
Notes receivable............ (1,812) (61,263) (70,609) (9,554) (84,479)
Inventories................. (2,227,883) (1,891,222) 3,268,068 288,558 (5,294,538)
Floor plan notes payable,
net....................... 2,887,279 1,231,619 (3,356,184) (423,525) 4,688,220
Accounts payable............ 170,963 104,845 (9,168) (59,564) 309,319
Accrued liabilities......... 8,905 (133,019) 240,947 436,416 425,506
Other....................... (48,944) 21,158 (179,461) 84,028 258,509
----------- ----------- ----------- ---------- -----------
Net cash provided by
operating
activities........... 1,895,803 669,220 1,424,259 1,124,555 443,736
INVESTING ACTIVITIES
Purchases of property and
equipment...................... (322,999) (78,902) (163,179) (213,929) (35,828)
Purchase of business............. (1,496,372) (275,187) -- -- --
Proceeds from sale of assets..... -- 263,703 89,903 -- 56,580
----------- ----------- ----------- ---------- -----------
Net cash (used in)
provided by investing
activities........... (1,819,371) (90,386) (73,276) (213,929) 20,752
FINANCING ACTIVITIES
Payments on long term debt....... (3,978) (50,122) (54,824) (13,249) (12,491)
Payments and changes in due
to/from subsidiaries not being
acquired by SAG, net........... 76,565 87,324 56,172 (110,145) (137,739)
----------- ----------- ----------- ---------- -----------
Net cash provided by
(used in) financing
activities........... 72,587 37,202 1,348 (123,394) (150,230)
----------- ----------- ----------- ---------- -----------
Increase in cash and cash
equivalents.................... 149,019 616,036 1,352,331 787,232 314,258
Cash and cash equivalents at
beginning of the year.......... 1,641,003 1,790,022 2,406,058 2,406,058 3,758,389
----------- ----------- ----------- ---------- -----------
Cash and cash equivalents at end
of the year.................... $ 1,790,022 $ 2,406,058 $ 3,758,389 $3,193,290 $ 4,072,647
=========== =========== =========== ========== ===========

See accompanying notes.

F-29
156

JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1997

1. BASIS OF PRESENTATION

Pursuant to a stock purchase agreement dated January 5, 1998, (the
"Purchase Agreement") Sunbelt Automotive Group, Inc. ("SAG") has agreed to
purchase all of the issued and outstanding shares of the common stock of Jay
Automotive Group, Inc. ("JAG") subject to certain terms and closing conditions
as set forth in the Purchase Agreement. JAG has various wholly-owned
subsidiaries through which it operates the Toyota, Saturn, Mazda, Pontiac,
Buick, GMC, Suzuki, and Mitsubishi automobile dealerships located in Columbus,
Georgia.

JAG also owns and operates, through other of its wholly-owned subsidiaries,
other businesses which are not being acquired by SAG. Under the terms of the
Purchase Agreement, such businesses will be liquidated or spun off prior to the
closing date. The closing date is anticipated to occur prior to June 30, 1998.
Jay Leasing, Inc. ("Jay Leasing"), a subsidiary not being acquired by SAG, owns
or leases certain land, buildings and equipment used by Jay Automotive Group,
Inc. (see Note 11).

The accompanying financial statements are intended to present the
operations of Jay Automotive Group, Inc. which are to be acquired and operated
by SAG pursuant to the Purchase Agreement and do not include the other
operations of JAG which will be sold, liquidated or spun off. Accordingly, the
operations of the Saturn dealership are not included in the accompanying
financial statements. The accompanying financial statements include the accounts
of JAG and certain of its wholly-owned subsidiaries: Jay Pontiac-Buick-GMC,
Inc., Jay Automotive Group II, Inc. d/b/a Jay Toyota and Jay Automotive Group V,
Inc. d/b/a Jay Mazda, collectively ("Jay Automotive" or the "Company").

The accompanying financial statements are derived from the historical books
and records of Jay Automotive and do not give effect to any purchase accounting
adjustments that SAG may record as a result of its acquisition.

2. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

REVENUE RECOGNITION

Revenues from vehicle and parts sales and from service operations are
recognized at the time the vehicle is delivered to the customer or service is
completed. The Company generates ancillary revenues from its vehicle sales
operations. Such revenues include finance fees, insurance fees and service
contract commissions. Finance fees represent revenue earned by the Company for
notes placed with financial institutions in connection with customer vehicle
financing. Finance fees are generally recognized in income upon acceptance of
the credit by the financial institution. Insurance income represents commissions
earned on credit life, accident and disability insurance sold in connection with
a vehicle on behalf of third-party insurance companies. Insurance and service
contract commissions are recognized at contract execution.

A portion of fees and commissions for finance, insurance or certain service
contracts can be charged back to the Company if the customer terminates a
contract prior to its scheduled maturity. An estimated allowance

F-30
157
JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
for these chargebacks is recorded based upon the Company's historical experience
for prepayments or defaults on the finance and insurance contracts.

INVENTORIES

All inventory is valued at the lower of cost, as determined under the LIFO
method, or market. Cost of new and used vehicles is determined using the
last-in, first-out "LIFO" method. Cost of parts, accessories and other are
determined primarily by using factory list price using the first-in, first-out
"FIFO" method except for those parts and accessories related to the Toyota
dealership which are costed on the LIFO method. Cost of sales during the year
ended December 31, 1997 decreased approximately $89,000 due to a decrement in
the LIFO layer.

OTHER CURRENT ASSETS

Included in other current assets are notes receivable from JAG's
stockholder of $76,644 and $313,000 at December 31, 1996 and 1997, respectively.
Amounts outstanding at December 31, 1996 and 1997 under these notes carried
effective interest rates of 9% and LIBOR plus 1.5%, respectively. The
outstanding balance at December 31, 1997 was repaid in January 1998.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation.
Depreciation expense is provided on accelerated methods over the estimated
useful lives of the assets. The ranges of estimated useful lives are as follows:

Furniture and fixtures...................................... 3 - 5 years
Leasehold improvements...................................... 5 - 19 years
Machinery and shop equipment................................ 5 years

INCOME TAXES

The Company files a consolidated federal income tax return with its
subsidiaries. The accompanying financial statements exclude the income tax
expense and/or benefit associated with income or losses of the JAG operations
that will be sold, liquidated or spun off (see Note 1).

The Company accounts for income taxes in accordance with FASB Statement No.
109, Accounting for Income Taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rate
and laws that will be in effect when the differences are expected to reverse.
The temporary differences are primarily the result of valuation reserves and
warranty reserves. Temporary differences are not material.

INTANGIBLE ASSETS

Intangibles consist of goodwill that represents the excess of cost over
assigned fair market value of dealerships acquired and are being amortized on a
straightline basis over 15 years. Accumulated amortization was approximately
$2,000 and $22,000 at December 31, 1996 and 1997, respectively. The carrying
amount of intangibles and other long lived assets are reviewed if facts and
circumstances suggest that it may be impaired. If this review indicates that the
carrying value of these assets will not be recoverable, as determined based on
the estimated undiscounted cash flows of the entity acquired over the remaining
amortization period, the carrying amount of the asset is reduced by the
estimated shortfall of cash flows.

F-31
158
JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of contracts in transit and
accounts receivable. Also, at times, cash deposits in banks exceed the Federal
Deposit Insurance Corporation insurance limit. Contracts in transit are for
funds received shortly after the balance sheet date from contracts financed with
financial institutions. Significant trade receivables result from the extension
of credit for short-term periods to customers located within the Columbus,
Georgia area. Accounts receivable for motor vehicles, parts and services are
mostly from customers and other automotive dealers in Georgia. Finance companies
receivables are commissions on credit contracts of customers. Receivables also
result from transactions with automotive manufacturers.

Although the Company is directly affected by the economic effects in the
automotive industry, financial institutions, banks, its customers and the
general economy of the Columbus, Georgia and the surrounding geographical area,
management does not believe significant credit risk exists.

MAJOR SUPPLIERS

The Company purchases substantially all of its new vehicles and parts
inventory from automobile manufacturers/distributors at the prevailing prices
charged by the manufacturers/distributors to all franchise dealers. The Company
enters into agreements ("Dealer Agreements") with each manufacturer. The Dealer
Agreements, among other things, generally limit the location of the dealership
and include manufacturer approval rights over changes in dealership management
and ownership. A manufacturer is also entitled to terminate the Dealer Agreement
if the dealership is in material breach of the Dealer Agreement terms.

ADVERTISING

The Company expenses the cost of advertising as incurred. Advertising
expense was approximately $654,000, $705,000 and $789,000 for the years ended
December 31, 1995, 1996 and 1997, respectively. Substantially all advertising is
contracted through an affiliate of the stockholder.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company considers the carrying amounts of significant classes of
financial instruments on the accompanying balance sheets, including cash and
contracts in transit, notes payable and long-term debt to be reasonable
estimates of fair value due. Fair value of the Company's debt was estimated
using discounted cash flow analysis, based on the Company's current estimated
incremental borrowing rates for similar instruments.

INTERIM FINANCIAL STATEMENTS

The accompanying unaudited financial statements as of March 31, 1998 and
the three months ended March 31, 1997 and 1998 have been prepared on
substantially the same basis as the audited financial statements and include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the financial information set forth therein.

3. BUSINESS COMBINATIONS

On November 20, 1995, Jay Mazda purchased substantially all the assets and
assumed certain liabilities of Charles Levy Mazda for approximately $1.5 million
in cash and notes payable of $300,000. The excess of the purchase price over the
net tangible assets acquired was not material.

On December 16, 1996, Jay Pontiac-Buick-GMC, Inc. acquired the Buick Sales
and Service Agreement. At the date of acquisition, the Company purchased
vehicles and other items for a cash payment of
F-32
159
JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. BUSINESS COMBINATIONS (CONTINUED)
approximately $275,000 and the assumption of approximately $1,824,000 of floor
plan liabilities. The excess of the purchase price over the net tangible assets
acquired was approximately $300,000. As part of the terms of an exclusive use
agreement, JAG could be required to pay $225,000 to General Motors if there is a
breach of certain covenants as set forth in the agreement. Pro forma results are
not presented for this acquisition as they are not significant during the years
presented.

4. JAG CAPITALIZATION

JAG has 500,000 shares of $10 par value common stock authorized of which
21,955 shares were issued and outstanding at both December 31, 1996 and 1997.
The JAG capitalization also includes additional paid-in-capital of $573,348 at
both December 31, 1996 and 1997. See Note 9 for a discussion of JAG corporate
allocations and changes in owner's equity.

5. INVENTORIES

Inventories consist of the following:

DECEMBER 31,
-------------------------
1996 1997
----------- -----------

New vehicles................................................ $10,730,881 $ 8,433,366
Used vehicles............................................... 4,299,635 3,512,675
Parts, accessories and other................................ 1,321,698 1,240,092
----------- -----------
16,352,214 13,186,133
Less LIFO reserve........................................... (1,061,506) (1,163,493)
----------- -----------
$15,290,708 $12,022,640
=========== ===========

6. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

DECEMBER 31,
------------------------
1996 1997
---------- -----------

Leasehold improvements...................................... $ 171,881 $ 171,881
Machinery and shop equipment................................ 914,969 996,511
Furniture and fixtures...................................... 326,424 364,407
Rental cars and company vehicles............................ 579,796 509,752
---------- -----------
1,993,070 2,042,551
Less accumulated depreciation............................... (979,761) (1,153,297)
---------- -----------
$1,013,309 $ 889,254
========== ===========

F-33
160
JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. FLOOR PLANS AND LONG-TERM DEBT

A summary of floor plans and long-term debt is as follows:

DECEMBER 31,
------------------------ MARCH 31,
1996 1997 1998
----------- ---------- -----------
(UNAUDITED)

World Omni Financial Corporation floor plan;
availability of $4.7 million; secured by
vehicle inventories; due upon sale of vehicles;
interest payable monthly at prime, plus .25%
reduced by various factory incentives.......... $ 2,100,396 $ 819,309 $ 2,257,627
GMAC floor plan; availability of $9 million at
December 31, 1997 subsequently raised to $13
million during March 1998; secured by vehicle
inventories; due upon sale of vehicles;
interest payable monthly at 1% above prime,
reduced by various GMAC and factory
incentives..................................... 8,405,449 6,766,165 9,808,281
First Union floor plan; availability of
$3,850,000; secured by vehicle inventories; due
upon sale of vehicles; interest payable monthly
at 2% over LIBOR, reduced by various factory
incentives..................................... 1,869,520 1,433,707 1,641,493
----------- ---------- -----------
$12,375,365 $9,019,181 $13,707,401
=========== ========== ===========
Note payable; bearing interest at 9% due in
monthly installments of principal and interest
of $6,228 through November 2000................ $ 245,900 $ 191,076 $ 178,585
Less current installments of long-term debt...... (60,000) (60,000) (60,000)
----------- ---------- -----------
$ 185,900 $ 131,076 $ 118,585
=========== ========== ===========

During 1995, 1996 and 1997, total cash paid for interest on floor plans and
long-term debt was $444,000, $382,000 and $368,000, respectively.

8. INCOME TAXES

The Company files consolidated federal and state income tax returns with
its subsidiaries. The current income tax provision represents the amount of
income taxes paid or payable, by Jay Automotive for each year. The deferred
income tax provision is not material. Significant components of the provisions
for income taxes are as follows:

YEAR ENDED DECEMBER 31,
------------------------------
1995 1996 1997
-------- -------- --------

Current income taxes:
Federal.............................................. $598,000 $659,000 $685,000
State................................................ 104,792 115,742 121,000
-------- -------- --------
Total provision for income taxes............. $702,792 $774,742 $806,000
======== ======== ========

F-34
161
JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. INCOME TAXES (CONTINUED)
A reconciliation of the expected income tax expense at the statutory
federal rate to Jay Automotive's actual income tax provision is as follows:

YEAR ENDED DECEMBER 31,
------------------------------
1995 1996 1997
-------- -------- --------

Federal statutory benefit.............................. $630,000 $690,000 $721,000
State benefit, net of federal benefit.................. 70,000 77,000 80,000
Other.................................................. 2,792 7,742 5,000
-------- -------- --------
$702,792 $774,742 $806,000
======== ======== ========

Jay Automotive made income tax payments of approximately $830,000,
$1,019,000 and $555,000 during the years ended December 31, 1995, 1996 and 1997,
respectively.

9. JAG CORPORATE ALLOCATIONS AND OWNERS' EQUITY

The corporate employees and operations of JAG provide management and
related services to the various JAG subsidiaries. An allocation of corporate
costs has not been made to the operations of the subsidiaries not included in
the accompanying financial statements because such amounts would not be
material.

JAG provides centralized cash management for all subsidiaries. There are no
terms of settlement nor interest charges on intercompany accounts. All
intercompany balances due to/from the subsidiaries not being acquired by SAG are
included as a part of owner's equity.

JAG allocates certain employee benefits to the various operations,
including those operations not being acquired by SAG, based on directly
identifiable incurred costs.

JAG did not pay any dividends to its stockholder during the three year
period ended December 31, 1997. An analysis of the net transactions in the
owner's equity accounts for each of the three years in the period ended December
31 is as follows:

1995 1996 1997
---------- ---------- ----------

Balance of the beginning of year................... $3,994,109 $5,222,095 $6,564,428
Payments to JAG and change in due to/from
subsidiaries not being acquired by SAG, net... 76,565 87,354 56,172
Net earnings..................................... 1,151,421 1,254,979 1,316,106
---------- ---------- ----------
Balance at the end of year......................... $5,222,095 $6,564,428 $7,936,706
========== ========== ==========

10. COMMITMENTS AND CONTINGENCIES

The Company and its subsidiaries are involved in various legal proceedings
which are normal to its business. In the opinion of management, the ultimate
liabilities, if any, resulting from such lawsuits and claims, will not have a
material adverse effect on the operating results, liquidity or the financial
position of the Company.

Substantially all of the Company's facilities are subject to federal, state
and local provisions regulating the discharge of materials into the environment.
Compliance with these provisions has not had, nor does the Company expect such
compliance to have, any material effect upon the capital expenditures, net
income, financial condition or competitive position of the Company. Management
believes that its current practices and procedures for the control and
disposition of material and wastes comply with applicable federal and state
requirements.

F-35
162
JAY AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

11. LEASES

The Company is obligated under certain written or verbal leases for certain
buildings, land and equipment. The leases generally provide for the payment of
fixed monthly rentals and the payment of property taxes, insurance and repairs.
These operating leases provide for the following payments:

1998........................................................ $250,645
1999........................................................ 181,188
2000........................................................ 25,820
--------
$457,653
========

Total rent expense for the years ended December 31, 1995, 1996 and 1997 was
approximately $441,000, $543,000 and $526,000, respectively. Rent expense
includes approximately $157,000, $277,000 and $279,000 for verbal leases with
Jay Leasing for the years ended December 31, 1995, 1996 and 1997, respectively.

By March 1998, all of the Company's operations except for the Toyota
dealership, the Mazda dealership and three used car stores, relocated to a new
auto mall. The Toyota dealership and Mazda dealership will relocate to the auto
mall by June 1998. The cost of the acquisition, construction and equipping of
the auto mall was financed through the issuance of industrial revenue bonds (the
"Revenue Bonds") by the Development Authority of Columbus, Georgia (the
"Development Authority") in the aggregate principal amount of $10 million. The
Revenue Bonds bear interest at a variable rate (as defined in the Bond
Indenture), but may be converted to a term rate at the election of the lessee,
subject to certain terms and restrictions described in the Bond Indenture.
Interest on the Revenue Bonds may be payable quarterly, semiannually or on the
day following a variable rate or term rate period depending on the rate chosen
by the lessee. JAG, Jay Leasing and JAG's shareholder have guaranteed the
Revenue Bonds.

The auto mall is leased by the Development Authority to Jay Leasing
pursuant to a lease agreement dated as of July 1, 1997 and expiring on July 1,
2017. Rental payments due under the lease agreement mirror the debt service
requirements set forth in the Bond Indenture. After having met certain terms and
conditions (as described in the lease agreement), Jay Leasing has the right to
purchase the auto mall from the Authority for $10. Aggregate annual principal
payments due on the Revenue Bonds are as follows:

1998........................................................ $ 255,000
1999........................................................ 280,000
2000........................................................ 305,000
2001........................................................ 325,000
2002........................................................ 355,000
Thereafter.................................................. 8,480,000
-----------
$10,000,000
===========

A formal lease for the auto mall between Jay Leasing and the other JAG
affiliates, including the Saturn dealership, has not yet been finalized.
Management anticipates that rental expense to be paid to Jay Leasing for the
auto mall, including the Saturn dealership, will approximate $1.1 million
annually for twenty years.

12. EMPLOYEE BENEFIT PLAN

The Company has an employee savings plan under Section 401(k) of the
Internal Revenue Code. This plan covers substantially all eligible, full time
employees. The Company may elect to make contributions to match a portion of the
employees' contributions. The Company's contributions vest ratably over five
years. The amounts charged against income in the accompanying financial
statements for the Company's contributions to the plan for the years ended
December 31, 1995, 1996 and 1997 was approximately $22,000, $60,000 and $43,000,
respectively.

F-36
163

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Grindstaff, Inc.

We have audited the accompanying balance sheets of Grindstaff, Inc. as of
December 31, 1996 and 1997, and the related statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Grindstaff, Inc. at December
31, 1996 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
February 13, 1998

F-37
164

GRINDSTAFF, INC.

BALANCE SHEETS

DECEMBER 31,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................. $ 1,433,537 $ 293,036 $ 721,736
Accounts receivable, net.............................. 789,155 748,928 971,608
Inventories........................................... 8,024,643 7,849,280 8,331,248
Prepaid expenses and other current assets............. 16,537 38,664 38,406
Deferred income taxes................................. 19,458 6,734 11,651
----------- ----------- -----------
Total current assets.......................... 10,283,330 8,936,642 10,074,649
Machinery and equipment, net............................ 1,065,223 1,225,749 1,145,897
Receivable from stockholders............................ 429,319 1,259,202 754,056
Other assets............................................ 161,359 107,432 84,092
----------- ----------- -----------
$11,939,231 $11,529,025 $12,058,694
=========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Floor plan notes payable.............................. $ 8,995,573 $ 8,953,198 $ 9,542,524
Accrued liabilities and other......................... 554,904 663,092 582,271
Accounts payable...................................... 727,534 537,607 470,564
Accounts payable -- related party..................... 720,000 -- --
Current maturities of long-term debt and capital
lease.............................................. 145,962 163,880 177,835
----------- ----------- -----------
Total current liabilities..................... 11,143,973 10,317,777 10,773,194
Long-term debt and capital lease, less current
portion............................................... 272,806 325,768 308,174
Stockholders' equity:
Common stock, $1,000 par value, 100 shares authorized,
100 shares issued and outstanding.................. 100,000 100,000 100,000
Treasury stock, 10 shares in 1996..................... (150,000) -- --
Additional paid-in capital............................ 948,212 948,212 948,212
Accumulated deficit................................... (375,760) (162,732) (70,886)
----------- ----------- -----------
Total stockholders' equity.................... 522,452 885,480 977,326
----------- ----------- -----------
$11,939,231 $11,529,025 $12,058,694
=========== =========== ===========

See accompanying notes.

F-38
165

GRINDSTAFF, INC.

STATEMENTS OF OPERATIONS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ----------- -----------
(UNAUDITED)

Revenues:
Vehicle sales................. $46,472,309 $50,384,680 $52,375,232 $11,751,278 $11,347,411
Parts and service............. 2,868,328 3,387,955 3,897,284 903,312 1,044,766
Finance, commission and other
revenues................... 2,780,852 2,533,780 2,516,837 765,067 634,930
----------- ----------- ----------- ----------- -----------
52,121,489 56,306,415 58,789,353 13,419,657 13,027,107
Cost of sales:
Vehicle sales................. 43,156,061 46,969,662 47,657,291 10,719,036 10,242,242
Parts and service............. 1,703,042 2,038,175 2,397,025 546,504 643,201
Finance, commission and other
revenues................... 1,002,577 981,760 1,159,684 297,304 265,143
----------- ----------- ----------- ----------- -----------
45,861,680 49,989,597 51,214,000 11,562,844 11,150,586
----------- ----------- ----------- ----------- -----------
Gross profit.................... 6,259,809 6,316,818 7,575,353 1,856,813 1,876,521
Selling, general and
administrative expenses....... 5,390,428 5,864,166 6,972,127 1,591,783 1,652,125
----------- ----------- ----------- ----------- -----------
Income from operations.......... 869,381 452,652 603,226 265,030 224,396
Interest expense................ 306,138 588,510 458,534 137,175 119,028
Interest income................. 137,828 167,456 26,516 -- --
Other income (expense), net..... (18,403) (509,191) 54,544 (8,290) (8,048)
----------- ----------- ----------- ----------- -----------
Income (loss) before income tax
benefit....................... 682,668 (477,593) 225,752 119,565 97,320
Income tax (expense) benefit.... (39,844) 32,347 (12,724) (12,010) (5,474)
----------- ----------- ----------- ----------- -----------
Net income (loss)..... $ 642,824 $ (445,246) $ 213,028 $ 107,555 $ 91,846
=========== =========== =========== =========== ===========

See accompanying notes.

F-39
166

GRINDSTAFF, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

ADDITIONAL TOTAL
COMMON TREASURY PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK STOCK CAPITAL DEFICIT EQUITY
-------- --------- ---------- ----------- -------------

Balance at January 1, 1995.............. $100,000 $ -- $948,212 $(573,338) $ 474,874
Net income............................ -- -- -- 642,824 642,824
-------- --------- -------- --------- ---------
Balance at December 31, 1995............ 100,000 -- 948,212 69,486 1,117,698
Repurchase of 10 shares of common
stock.............................. -- (150,000) -- -- (150,000)
Net loss.............................. -- -- -- (445,246) (445,246)
-------- --------- -------- --------- ---------
Balance at December 31, 1996............ 100,000 (150,000) 948,212 (375,760) 522,452
Issuance of 10 shares of common
stock.............................. -- 150,000 -- -- 150,000
Net income............................ -- -- -- 213,028 213,028
-------- --------- -------- --------- ---------
Balance at December 31, 1997............ $100,000 $ -- $948,212 $(162,732) $ 885,480
Net income (unaudited)................ -- -- -- 91,846 91,846
-------- --------- -------- --------- ---------
Balance at March 31, 1998 (unaudited)... $100,000 $ -- $948,212 $ (70,886) $ 977,326
======== ========= ======== ========= =========

See accompanying notes.

F-40
167

GRINDSTAFF, INC.

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -----------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- --------- -----------
(UNAUDITED)

OPERATING ACTIVITIES
Net income (loss)................ $ 642,824 $ (445,246) $ 213,028 $ 107,555 $ 91,846
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation................... 197,428 197,214 228,018 15,367 28,948
Amortization................... 32,654 34,906 33,101 6,560 7,397
Loss (gain) on sale of
machinery and equipment..... 2,236 (5,974) (3,902) -- --
Changes in operating assets and
liabilities:
Accounts receivable, net.... (286,121) 132,181 40,227 (141,756) (222,680)
Inventories................. (4,360,138) 2,159,881 175,363 343,585 (481,968)
Prepaid expenses and other
current assets............ 24,169 (6,002) (22,127) (48,247) 258
Deferred income taxes....... -- (19,458) 12,724 12,010 (4,917)
Receivable from
stockholders.............. -- (140,356) (829,883) (690,623) 505,146
Other assets................ 37,239 (65,229) 53,927 65,559 23,340
Floor plan notes payable.... 5,390,849 (2,783,027) (42,375) (279,548) 589,326
Accounts payable and accrued
liabilities............... 340,123 798,815 (801,739) (356,406) (147,864)
----------- ----------- ----------- --------- -----------
Net cash provided by
(used in) operating
activities........... 2,021,263 (142,295) (943,638) (965,944) 388,832
INVESTING ACTIVITIES
Proceeds on sale of investment... 46,759 -- -- -- --
Purchases of machinery and
equipment...................... (473,252) (144,993) (312,679) (74,077) (15,423)
Proceeds on disposal of machinery
and equipment.................. 36,792 29,297 154,650 37,512 58,930
----------- ----------- ----------- --------- -----------
Net cash used in
investing
activities........... (389,701) (115,696) (158,029) (36,565) 43,507
FINANCING ACTIVITIES
(Purchase) sale of treasury
stock.......................... -- (150,000) 150,000 150,000 --
Principal payments on long-term
debt........................... (124,529) (147,314) (188,834) (37,319) (3,639)
----------- ----------- ----------- --------- -----------
Net cash used in financing
activities..................... (124,529) (297,314) (38,834) 112,681 (3,639)
----------- ----------- ----------- --------- -----------
Change in cash and cash
equivalents.................... 1,507,033 (555,305) (1,140,501) (889,828) 428,700
Cash and cash equivalents at
beginning of the year.......... 481,809 1,988,842 1,433,537 1,433,537 293,036
----------- ----------- ----------- --------- -----------
Cash and cash equivalents at end
of the year.................... $ 1,988,842 $ 1,433,537 $ 293,036 $ 543,709 $ 721,736
=========== =========== =========== ========= ===========
SUPPLEMENTAL CASH FLOW
INFORMATION
Assets acquired under capital
leases......................... $ -- $ 48,961 $ 259,714 $ -- $ --
=========== =========== =========== ========= ===========
Cash paid for interest........... $ 267,698 $ 611,176 $ 465,353 $ 148,619 $ 127,755
=========== =========== =========== ========= ===========

See accompanying notes.

F-41
168

GRINDSTAFF, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1996 AND 1997

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF BUSINESS

Grindstaff, Inc. (the Company) is principally engaged in the business of
selling and servicing new and used vehicles. The Company operates three
dealerships in Northeast Tennessee: Grindstaff Chevrolet, Grindstaff Kia, and
Grindstaff Chrysler/Plymouth/Dodge/Jeep/Eagle.

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits in banks,
contracts in transit pertaining to the sale of vehicles, and all highly liquid
investments with an original maturity of three months or less at the date of
purchase. The Company's cash equivalents include $1,814,646 at December 31, 1996
and $66,624 at December 31, 1997, which it invested with GMAC as collateral
security for the Company's floor plan notes payable under its security agreement
with GMAC. In consideration, the Company receives a reduction in the interest
charged under the security agreement. So long as the Company is not in default
under its security agreement, it may, upon written request, require GMAC to
return all or a portion of the invested balance to it on the next business day
following receipt by GMAC of the request. The Company's management believes that
there is little, if any, credit risk because its investment may not exceed 75%
of the Company's floor plan notes payable to GMAC.

REVENUE RECOGNITION

Revenues from vehicle and parts sales and from service operations are
recognized at the time the vehicle is delivered to the customer or service is
completed.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful accounts is based on historical bad debt
experience and management's periodic evaluation of individual accounts.

INVENTORIES

All inventory is stated at the lower of cost or market. Cost of new and
used vehicles is determined using the last in, first-out (LIFO) method.

F-42
169
GRINDSTAFF, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MACHINERY AND EQUIPMENT

Machinery and equipment is stated at cost less accumulated depreciation.
Depreciation is provided predominately on the straight-line method over the
estimated useful lives of the assets. The ranges of estimated useful lives are
as follows:

Furniture and fixtures...................................... 5 - 10 years
Leasehold improvements...................................... 5 - 40 years
Machinery and shop equipment................................ 5 - 20 years
Rental cars and company vehicles............................ 7 years

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of contracts in transit and
accounts receivable. Also, at times, cash deposits in banks exceed the Federal
Deposit Insurance Corporation insurance limit. Contracts in transit are for
funds received shortly after the balance sheet date from contracts financed with
financial institutions. Trade receivables principally result from extending
short-term credit to a large number of customers and other automotive dealers
located in Northeast Tennessee. Finance companies receivables are commissions on
credit contracts of customers. Receivables also result from transactions with
automotive manufacturers. Although the Company is directly affected by the
economic conditions in the automotive industry, financial institutions, banks,
its customers and the general economy of Northeast Tennessee, management does
not believe significant credit risk exists.

INCOME TAXES

The Company has elected to be taxed under the provisions of Subchapter S of
the Internal Revenue Code. Under these provisions, the Company does not pay
federal corporate income taxes on its taxable income. Instead, the stockholders
are liable for individual income taxes on their respective share of the
Company's taxable income.

The Company accounts for state income taxes under the liability method.
Under the liability method, deferred income taxes are recorded to reflect the
net effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting and the amounts used for state income tax
purposes.

MAJOR SUPPLIER

ADVERTISING

The Company expenses the cost of advertising as incurred. Advertising
expense was $727,523, $912,853 and $1,139,148 for the years ended December 31,
1995, 1996 and 1997, respectively.

The Company considers the carrying amounts of significant classes of
financial instruments on the balance sheet, including cash and contracts in
transit, notes payable and long-term debt to be reasonable estimates of fair
value. Fair value of the Company's debt was estimated using discounted cash flow
analysis, based on the Company's current incremental borrowing rates for similar
types of arrangements.
F-43
170
GRINDSTAFF, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK DIVIDEND

On March 3, 1997, the Company effected a 1-for-2 common stock dividend. The
share amounts in the financial statements have been retroactively adjusted for
the stock dividend.

FAIR VALUE OF FINANCIAL INSTRUMENTS

INTERIM FINANCIAL STATEMENTS

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-------------------
1996 1997
-------- --------

Parts, service and wholesale................................ $314,785 $183,938
Factory..................................................... 376,643 473,186
Finance companies........................................... 56,403 46,638
Employees................................................... 44,389 52,967
-------- --------
792,220 756,729
Less allowance for doubtful accounts........................ (3,065) (7,801)
-------- --------
$789,155 $748,928
======== ========

3. INVENTORIES

Inventories consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-----------------------
1996 1997
---------- ----------

New vehicles................................................ $7,263,231 $7,494,649
Used vehicles............................................... 2,343,152 1,876,461
Parts, accessories and other................................ 275,064 387,370
---------- ----------
9,881,447 9,758,480
Less LIFO reserve........................................... 1,856,804 1,909,200
---------- ----------
$8,024,643 $7,849,280
========== ==========

F-44
171
GRINDSTAFF, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. MACHINERY AND EQUIPMENT

A summary of machinery and equipment is as follows as of December 31, 1996
and 1997:

DECEMBER 31,
-----------------------
1996 1997
---------- ----------

Leasehold improvements...................................... $ 866,414 $ 870,320
Machinery and shop equipment................................ 524,368 579,699
Furniture and fixtures...................................... 587,496 759,976
Rental cars and company vehicles............................ 317,674 345,411
---------- ----------
2,295,952 2,555,406
Less accumulated depreciation............................... 1,230,729 1,329,657
---------- ----------
$1,065,223 $1,225,749
========== ==========

5. FLOOR PLAN NOTES PAYABLE

Floor plan notes payable consists of notes with financial institutions. The
floor plan notes are secured by certain new and used vehicles. The floor plan
arrangements permit the Company to borrow up to $9,000,000 in 1996 and
$9,505,000 in 1997, restricted by new and used vehicles levels. The notes are
generally due within ten days of the vehicle being sold or after the vehicle has
been in inventory for one year for new vehicles and after three months for used
vehicles. The notes bear interest based on contractual rates, which ranged from
9.00% to 9.75% at December 31, 1997.

6. ACCRUED LIABILITIES AND OTHER

Accrued liabilities and other consist of the following at December 31, 1996
and 1997:

DECEMBER 31,
-------------------
1996 1997
-------- --------

Salaries, wages, bonus and vacation......................... $109,393 $258,666
Finance reserve............................................. 40,000 40,000
Accrued taxes............................................... 256,971 208,320
Accrued interest............................................ 66,371 79,563
Other accrued liabilities................................... 82,169 76,543
-------- --------
$554,904 $663,092
======== ========

F-45
172
GRINDSTAFF, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. LONG-TERM DEBT

A summary of long-term debt is as follows:

DECEMBER 31,
------------------- MARCH 31,
1996 1997 1998
-------- -------- -----------
(UNAUDITED)

Note payable -- General Motors Acceptance Corp.;
bearing interest at prime plus one percent (9.5% at
December 31, 1996 and 10% at December 31, 1997), due
on May 1999, secured by certain fixed assets, parts
and accessories and personal guarantee of a
stockholder of the Company.......................... $285,633 $187,328 $162,752
Note payable -- Reyna Financial Corp., lease on
certain computer equipment, bearing interest which
range between 5% - 11%, payable monthly until 2002,
secured by the equipment leased..................... 133,135 302,320 323,257
-------- -------- --------
418,768 489,648 486,009
Less current maturities of long-term debt and capital
lease............................................... 145,962 163,880 177,835
-------- -------- --------
$272,806 $325,768 $308,174
======== ======== ========

8. INCOME TAXES

The current income tax provision represents the amount of state income
taxes paid or payable for the year. The deferred income tax provision represents
the change in deferred tax liabilities and assets. Significant components of the
provisions for income taxes are as follows for the years ended December 31,
1995, 1996 and 1997, respectively:

DECEMBER 31,
----------------------------
1995 1996 1997
------- -------- -------

Current state income tax expense (benefit)............... $ 9,126 $(12,889) $ --
Deferred state income tax expense (benefit).............. 30,718 (19,458) 12,724
------- -------- -------
Total provision for income tax expense
(benefit).................................... $39,844 $(32,347) $12,724
======= ======== =======

The Company recorded deferred tax assets of $19,458 and $6,734 at December
31, 1996 and 1997, respectively, relating to unutilized net operating loss
carryforwards, which expire through 2011. The Company paid state income taxes of
$25,000, $53,203 and $51,598 for the years ended December 31, 1995, 1996 and
1997, respectively.

The pro forma provision for federal and state income taxes for the years
ended December 31, 1995, 1996 and 1997 would be $255,876, $(184,637) and
$80,503, respectively. The pro forma provision reflects amounts recorded related
to the state tax provision and that would have been recorded had the Company's
income been taxed for federal purposes as if it were a C Corporation.

F-46
173
GRINDSTAFF, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. COMMITMENTS AND TRANSACTIONS WITH RELATED PARTIES

The Company is obligated to related parties under certain non-cancelable
leases. These leases, which cover the lease of certain buildings, land and
equipment provide for the following payments:

CAPITAL OPERATING
LEASES LEASES TOTAL
-------- ---------- ----------

1998................................................ $ 63,880 $ 630,000 $ 693,880
1999................................................ 65,741 630,000 695,741
2000................................................ 69,713 630,000 699,713
2001................................................ 74,008 390,000 464,008
2002................................................ 28,978 -- 28,978
-------- ---------- ----------
Total minimum payments.................... $302,320 $2,280,000 $2,582,320
======== ========== ==========

Interest relating to capital leases is generally prepaid in the first year
of the lease. Total rent expense, all of which was paid to related parties, for
the years ended December 31, 1995, 1996 and 1997 was $541,000, $632,200 and
$687,000, respectively.

The Company is obligated under a non-cancelable operating lease on
buildings and automobile lots, which expires on June 30, 2001. A stockholder of
the Company is the leasor of the property.

During 1996, the Company made a $600,000 payment to terminate a property
lease with a stockholder of the Company. This termination payment was recorded
as other expense during 1996.

For all years presented, the Company paid certain personal expenses of a
stockholder and reflected these payments as a receivable from stockholder. This
receivable is due upon demand, non-interest bearing and unsecured.

10. GOVERNMENTAL REGULATION

Substantially all of the Company's facilities are subject to federal, state
and local provisions regulating the discharge of materials into the environment.
Compliance with these provisions has not had, nor does the Company expect such
compliance to have any material effect upon the capital expenditures, net
income, financial condition or competitive position of the Company. Management
believes that its current practices and procedures for the control and
disposition of such wastes comply with applicable federal and state
requirements.

11. SUBSEQUENT EVENT

Subsequent to December 31, 1997, the stockholders of the Company signed an
agreement to sell the stock of the Company. The agreement is subject to several
conditions, including the manufacturers' approval of change in dealership
management and ownership.

F-47
174

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Wade Ford, Inc.
3860 South Cobb Drive
Smyrna, GA 30080

We have audited the accompanying combined balance sheets of Wade Ford, Inc.
(an S corporation) and affiliate as of December 31, 1997, 1996 and 1995, and the
related combined statements of income, retained earnings, and cash flows for the
years then ended. These combined financial statements are the responsibility of
the Companies' management. Our responsibility is to express an opinion on these
combined financial statements based on our audits.

The combined financial statements include the financial statements of Wade
Ford, Inc. (an S corporation) and Wade Ford Buford, Inc. (an S corporation),
which are related through common ownership and management.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall combined
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Wade Ford, Inc. and
affiliate as of December 31, 1997, 1996 and 1995, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

Respectfully submitted,

/s/ PYKE & PIERCE, CPA'S

Certified Public Accountants

Atlanta, Georgia
February 9, 1998

F-48
175

WADE FORD, INC. AND WADE FORD BUFORD, INC.

COMBINED BALANCE SHEETS

DECEMBER 31,
--------------------------------------- MARCH 31,
1997 1996 1995 1998
----------- ----------- ----------- -----------
(UNAUDITED)

ASSETS
CURRENT ASSETS:
Cash........................................................ $ 4,661,059 $ 4,634,350 $ 1,953,192 $ 6,001,381
Accounts Receivable -- Trade (Net of Allowance for Doubtful
Accounts of $25,000 in 1997, $25,000 in 1996 and $91,519
in 1995).................................................. 4,088,793 3,656,387 3,518,142 4,420,784
Accounts Receivable -- Employees............................ 24,811 20,969 22,076 13,100
Inventories:
New Vehicles.............................................. 22,582,440 18,198,332 14,651,525 15,274,050
Used Vehicles............................................. 2,725,909 1,971,999 1,433,234 1,554,930
Parts, Accessories and Other.............................. 642,771 670,869 630,097 642,654
Prepaid Expenses............................................ 13,164 19,837 10,381 326,755
Note Receivable -- Stockholders............................. 502,531 484,045 431,592 514,516
----------- ----------- ----------- -----------
Total Current Assets................................ 35,241,478 29,656,788 22,650,239 28,748,170
----------- ----------- ----------- -----------
PROPERTY AND EQUIPMENT:
Buildings and Improvements.................................. 32,375 32,375 32,375 38,667
Parts and Service Equipment................................. 809,275 712,462 606,532 814,541
Rental Vehicles............................................. -- -- 704,243 --
Office Equipment............................................ 680,640 644,698 551,229 692,008
Leasehold Improvements...................................... 387,591 339,959 244,963 388,328
----------- ----------- ----------- -----------
1,909,881 1,729,494 2,139,342 1,933,544
Accumulated Depreciation.................................... (1,379,236) (1,249,139) (1,228,343) (1,419,406)
----------- ----------- ----------- -----------
Total Property and Equipment........................ 530,645 480,355 910,999 514,138
----------- ----------- ----------- -----------
INTANGIBLES AND OTHER ASSETS:
Deposits.................................................... 2,727 2,727 4,727 2,727
Cash Surrender Value of Life Insurance (Net of Policy
Loans).................................................... 68,426 68,790 68,371 68,527
Goodwill and Organization Expense (Net of Accumulated
Amortization of $65,266 in 1997, $63,154 in 1996 and
$57,154 in 1995).......................................... 24,688 27,160 32,800 24,070
----------- ----------- ----------- -----------
Total Intangibles and Other Assets.................. 95,841 98,677 105,898 95,324
----------- ----------- ----------- -----------
Total Assets........................................ $35,867,964 $30,235,820 $23,667,136 $29,357,632
=========== =========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Floor Plan Notes............................................ $30,714,435 $25,523,346 $20,017,316 $24,121,302
Notes Payable -- Officers and Stockholders.................. 980,000 1,189,999 658,004 855,000
Notes Payable -- Other...................................... 12,610 131,878 24,646 8,988
Accounts Payable............................................ 426,478 310,453 303,029 219,481
Accrued Payroll Taxes and Sales Taxes....................... 111,685 101,370 115,089 363,960
Accrued Wages............................................... 264,715 142,441 94,841 267,437
Accrued Interest............................................ 281,859 207,772 193,472 221,937
Accrued Taxes, Other than Income Tax........................ 105,361 50,743 55,927 22,907
Other Accrued Expenses...................................... 466,971 444,300 285,337 394,085
----------- ----------- ----------- -----------
Total Current Liabilities........................... 33,364,114 28,102,302 21,747,661 26,475,097
LONG-TERM LIABILITIES:
Notes Payable -- Officers and Stockholders.................. -- -- 690,000 --
Notes Payable -- Other...................................... 52,814 61,027 69,327 51,014
----------- ----------- ----------- -----------
Total Long-Term Liabilities......................... 52,814 61,027 759,327 51,014
----------- ----------- ----------- -----------
Total Liabilities................................... 33,416,928 28,163,329 22,506,988 26,526,111
----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY:
Common Stock................................................ 178,788 178,788 178,788 178,788
Additional Paid-In Capital.................................. 99,500 99,500 99,500 99,500
Retained Earnings........................................... 2,172,748 1,794,203 881,860 2,553,233
----------- ----------- ----------- -----------
Total Stockholders' Equity.......................... 2,451,036 2,072,491 1,160,148 2,831,521
----------- ----------- ----------- -----------
Total Liabilities and Stockholders' Equity.......... $35,867,964 $30,235,820 $23,667,136 $29,357,632
=========== =========== =========== ===========

See accompanying notes and Independent Auditor's Report.

F-49
176

WADE FORD, INC. AND WADE FORD BUFORD, INC.

COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------ -------------------------
1997 1996 1995 1997 1998
------------ ------------ ------------ ----------- -----------
(UNAUDITED)

Sales
Vehicle sales.............. $154,372,002 $133,329,152 $106,391,291 $39,053,811 $37,169,016
Parts, service and
collision repair........ 9,243,897 8,809,835 9,117,897 2,325,766 2,481,010
Finance, commission and
other revenues.......... 2,424,016 1,974,405 1,470,432 480,980 500,465
------------ ------------ ------------ ----------- -----------
166,039,915 144,113,392 116,979,620 41,860,557 40,150,491
Cost of sales
Vehicle sales.............. 147,941,339 126,915,778 101,654,664 37,259,476 35,758,589
Parts, service and
collision repair........ 4,738,843 4,546,274 4,932,221 1,252,732 1,298,382
Finance, commission and
other revenues.......... 698,148 519,671 439,866 164,248 173,867
------------ ------------ ------------ ----------- -----------
153,378,330 131,981,723 107,026,751 38,676,456 37,230,838
------------ ------------ ------------ ----------- -----------
Gross profit................. 12,661,585 12,131,669 9,952,869 3,184,101 2,919,653
Selling, general and
administrative expense..... 10,467,214 11,261,008 9,503,822 2,636,869 2,580,529
------------ ------------ ------------ ----------- -----------
Income from operations....... 2,194,371 870,661 449,047 547,232 339,124
Floor plan interest.......... 157,354 290,813 155,948 64,211 93,692
Interest income.............. 162,322 81,802 35,970 42,385 127,816
Other income................. 95,405 252,046 229,703 11,984 7,237
------------ ------------ ------------ ----------- -----------
Net income......... 2,294,744 913,696 558,772 537,390 380,485
Retained
earnings -- Beginning...... 1,794,203 881,860 562,443 1,794,203 2,172,748
Less: Current Year
Distributions........... (1,916,199) (1,353) (239,355) -- --
------------ ------------ ------------ ----------- -----------
Retained earnings --Ending... $ 2,172,748 $ 1,794,203 $ 881,860 $ 2,331,593 $ 2,553,233
============ ============ ============ =========== ===========

See accompanying notes and Independent Auditor's Report.

F-50
177

WADE FORD, INC. AND WADE FORD BUFORD, INC.

COMBINED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -------------------------
1997 1996 1995 1997 1998
----------- ----------- ----------- ----------- -----------
(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................ $ 2,294,744 $ 913,696 $ 558,772 $ 537,390 $ 380,485
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization........... 143,419 141,847 229,400 17,591 21,150
Change in LIFO Reserve.................. 72,080 328,080 744,610 -- --
Cash Value of Officer's Life
Insurance............................. 364 (419) 865 -- (101)
(Increase) Decrease In:
Accounts Receivable................... (424,263) (161,123) (381,180) (452,647) (320,280)
Inventories........................... (5,182,000) (3,865,593) (68,333) 4,888,935 8,481,668
Prepaid Expenses...................... 6,673 (9,456) (10,381) (120,920) (313,591)
Notes Receivable...................... (30,471) (28,468) (290,257) 11,985 (11,985)
Deposits.............................. -- 2,000 (2,000) -- --
Increase (Decrease) In:
Floor Plan Notes...................... 5,191,089 5,506,030 189,576 (3,471,541) (6,593,133)
Accounts Payable and Accrued
Expenses............................ 399,990 209,384 107,535 6,596 (167,262)
----------- ----------- ----------- ----------- -----------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES........... 2,471,625 3,035,978 1,078,607 1,417,389 1,476,951
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment........ (184,767) (294,395) (727,368) (20,715) (6,207)
----------- ----------- ----------- ----------- -----------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES........... (184,767) (294,395) (727,368) (20,715) (6,207)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from Stockholder.................... 530,000 -- -- -- --
Repayment of Loans from Stockholders...... (1,050,000) -- (50,000) (1,314,302) (128,152)
Proceeds from Long-Term Borrowings........ 705,000 336,524 1,036,080 16,638 --
Repayment on Long-Term Borrowings......... (528,950) (395,596) (792,583) -- (2,270)
Distribution to Owners.................... (1,916,199) (1,353) (239,355) -- --
----------- ----------- ----------- ----------- -----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES........... (2,260,149) (60,425) (45,858) (1,297,664) (130,422)
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
CASH........................... 26,709 2,681,158 305,381 99,010 1,340,322
CASH AT BEGINNING OF YEAR................. 4,634,350 1,953,192 1,647,811 4,634,350 4,661,059
----------- ----------- ----------- ----------- -----------
CASH AT END OF YEAR....................... $ 4,661,059 $ 4,634,350 $ 1,953,192 $ 4,733,360 $ 6,001,381
=========== =========== =========== =========== ===========
SUPPLEMENTAL DISCLOSURES:
INTEREST PAID............................. $ 2,580,002 $ 2,326,346 $ 2,016,521 $ 597,674 $ 761,101
=========== =========== =========== =========== ===========

See accompanying notes and Independent Auditor's Report.

F-51
178

WADE FORD, INC. AND WADE FORD BUFORD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Wade Ford, Inc., located in Smyrna, Georgia, (Smyrna) is an authorized Ford
dealership. Wade Ford Buford, Inc., (Buford) located in Buford, Georgia, is an
authorized Ford-Mercury dealership. The dealerships provide retail and fleet
sales of new and used vehicles, parts and service. The Companies' principal
market areas are the Metropolitan Atlanta area and Northeast Georgia. A major
component of the Buford business is dealer financing of used car sales, also
known as "Tote-Note" sales. Dealer finance receivables are secured by
automobiles sold. Most contracts have payment terms in the 12 to 24 month range.
Because the loans are made principally in the Northeast Georgia and Metropolitan
Atlanta area, the ultimate ability to collect amounts due may be affected by
local economic fluctuations.

REVENUE RECOGNITION

EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED AND ORGANIZATIONAL
EXPENSES

The excess of cost over the net assets of businesses acquired at original
purchase in 1982 (Smyrna) is being amortized on a straight-line basis over a
25-year period. Organizational expenses of Buford are being amortized on the
straight-line method over a five year period. The Organizational expenses
(Buford) became fully amortized in 1996. Amortization expense charged to
operations for 1997, 1996 and 1995 was $2,470, $2,470 and $5,638, respectively.

INVENTORIES

All inventories are valued at the lower of cost or market. The cost of new
and used vehicles and parts is determined using the last-in, first-out method
(LIFO). If the first-in, first-out (FIFO) method had been used to determine the
cost of new and used vehicles and parts, the inventories would have been
increased by approximately $3,601,316 at December 31, 1997, $3,407,171 at
December 31, 1996 and $2,807,787 at December 31, 1995. Also, the Companies would
have reported net income of approximately $1,590,323 for 1997, $1,885,162 for
1996 and $1,727,511 for 1995.

F-52
179
WADE FORD, INC. AND WADE FORD BUFORD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

The Companies have elected to be treated as S Corporations for Federal and
State income tax purposes. Under this election, items of profit and loss are
passed through to the shareholders. Accordingly, the financial statements do not
reflect any provision for income tax expense.

The pro forma provision for income taxes for the years ended December 31,
1997, 1996 and 1995 would be $863,941, $336,872 and $191,771, respectively. The
pro forma provision reflects amounts that would have been recorded had the
Companies' income been taxed for federal and state purposes as if they were C
Corporations.

PROPERTY AND EQUIPMENT

Property and Equipment are recorded at cost. Maintenance and repairs are
charged to expense as incurred, and renewals and betterments are capitalized.
Gains or losses on disposals are credited or charged to operations. Depreciation
is provided using the straight-line method over the estimated useful lives of
the assets acquired prior to January 1, 1981 and straight-line and accelerated
methods, for assets acquired subsequent to December 31, 1980. Depreciation and
amortization expense for 1997, 1996 and 1995 was $143,419, $141,847 and $229,400
respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, contracts in transit
pertaining to the sale of vehicles, all highly liquid investments with an
original maturity of three months or less at the date of purchase, and the Cash
Management Account (See Note 9).

PRINCIPLES OF COMBINATION

The accompanying combined financial statements present the combination of
the financial statements of Wade Ford, Inc. and the financial statements of Wade
Ford Buford, Inc., both of which are under common control.

FAIR VALUES OF FINANCIAL INSTRUMENTS

INTERIM FINANCIAL STATEMENTS

F-53
180
WADE FORD, INC. AND WADE FORD BUFORD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. CASH SURRENDER VALUE

The Smyrna dealership is the beneficiary of insurance policies on the life
of a former stockholder and previous owner of Wade Ford, Inc. At December 31,
1997, 1996 and 1995, notes payable to the insurance companies in the amounts of
$42,940, respectively, were collateralized by the cash value of the policies
which is $68,426 for 1997, $68,790 for 1996 and $68,371 for 1995.

3. FLOOR PLAN NOTES -- FORD MOTOR CREDIT CORPORATION

The Companies' floor plan notes payable to Ford Motor Credit Co. are floor
plan loans bearing interest at 1% over the floating prime commercial lending
rate. Principal payments are made as each unit of the new and used vehicle
inventory is sold. Interest is payable monthly. The notes are collateralized by
the new and used vehicle inventory.

Notes payable to Ford Motor Credit Co. -- Rental vehicles are floor plan
loans bearing interest at 2 3/4% over the commercial paper rate based on the
date the vehicle is put into rental service. Principal payments are made monthly
at a rate of 1.75% of the capitalized cost of the rental truck and 2 1/4% for
rental car. When a vehicle is taken out of rental service, any remaining
principal balance is then due.

4. LONG-TERM DEBT

Long-term debt consists of the following:

MARCH 31,
1997 1996 1995 1998
-------- --------- -------- -----------
(UNAUDITED)

Note payable to irrevocable trust of a
former stockholder. Interest is 1% above
floating prime and payable monthly. Note
is unsecured............................. $ -- $ -- $580,000 $ --
Note Payable to estate of a former
stockholder. Interest is 1% above
floating prime and payable monthly.
Principal due November 15, 1997.......... -- 110,000 110,000 --
Notes Payable for cash value of life
insurance. Interest is payable at 5
percent.................................. 42,940 42,940 42,940 42,940

Installment notes payable, payable in
variable monthly installments of
principal plus interest, interest from
7.5% to 9%, due between 1994 and 1998,
secured by Rotunda equipment............. 22,484 39,965 51,033 17,062
-------- --------- -------- --------
65,424 192,905 783,973 60,002
Less Current Maturities.................... (12,610) (131,878) (24,646) (8,988)
-------- --------- -------- --------
TOTAL LONG-TERM DEBT............. $ 52,814 $ 61,027 $759,327 $ 51,014
======== ========= ======== ========

As of December 31, 1997, long-term debt matures approximately as follows:

1998........................................................ $12,610
1999........................................................ 47,730
2000........................................................ 3,813
2001........................................................ 1,271
2002........................................................ --
-------
$65,424
=======

F-54
181
WADE FORD, INC. AND WADE FORD BUFORD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. LEASE COMMITMENTS

The Companies rent their facilities under operating leases. Smyrna rents a
portion of its facility from an officer/shareholder. Buford leases its
facilities from an officer/shareholder. While the agreements provide for minimum
lease payments, the leases also provide that the Company pay the taxes,
insurance, and maintenance expenses related to the leased property. Buford's
lease as of December 31, 1997, is being continued on a month-to-month basis.
Smyrna's lease is noncancellable through the end of its term.

The following is a schedule by years of future minimum lease payments
required under the Companies' operating leases:

1998........................................................ $ 420,000
1999........................................................ 423,000
2000........................................................ 432,000
2001........................................................ 435,000
2002........................................................ 444,000
2003 and thereafter......................................... 2,166,000

Total rent expense for 1997, 1996 and 1995 was $659,471, $658,543 and
$651,828, respectively.

The Companies also lease their computer system and have other equipment
leases. These leases are treated as operating leases. Future minimum lease
payments required under the above written lease agreements are:

1998........................................................ $84,775
1999........................................................ 83,777
2000........................................................ 83,777
2001........................................................ 15,795
2002........................................................ --

6. ARRANGEMENTS FOR RENTAL TO OTHERS

The Smyrna location rents cars and trucks to others under agreements with
varying terms, primarily daily, weekly or monthly, with renewal options. The
agreements are cancelable by either party. The Company holds title to the cars
and finances the arrangements by blanket-type rent payments consisting of
principal, interest and insurance. Interest is payable at 3/4 percent over
floating prime at date of rental. Ford Motor Company is the lien holder on the
vehicles. The dealership discontinued this program during 1996 and had no
vehicles at December 31, 1997 or 1996.

The following is an analysis of the book value of the rental cars at
December 31, 1995:

Cost........................................................ $704,243
Less Accumulated Depreciation............................... 115,412
--------
$588,831
========

During the years ended December 31, 1995 and 1996, rental cars with a book
value of $3,349,764 and $588,831 were transferred from property and equipment to
inventory, for re-sale. Revenue from vehicle rentals for 1996 and 1995 was
approximately $224,000 and $580,000, respectively and is included in other
revenues in the combined statements of income.

7. PROFIT SHARING PLAN

The Companies have profit-sharing plans that cover any employee with 12
months of service. Enrollment, when eligible, is January 1 or July 1 of each
year. Contributions to the plans are based on a formula and are

F-55
182
WADE FORD, INC. AND WADE FORD BUFORD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. PROFIT SHARING PLAN (CONTINUED)
contingent upon the attainment of certain level of earnings as defined in the
agreements. During 1997, 1996 and 1995, contributions to the plans charged to
operations were $55,841, $51,662 and $39,958, respectively.

8. RELATED PARTY TRANSACTIONS

1997 1996 1995
-------- -------- --------

Accounts Receivable Stockholders............................ $ 38,015 $ 50,000 $ 26,015
Notes Receivable from Stockholders $85,000 demand note with
interest at 8.5%; $50,000 demand note with interest at 7%;
$204,741 demand note with interest at 8%; $22,749 demand
note with interest at 8%; (includes accrued interest of
$98,670, $68,849 and $39,396 in 1997, 1996, and 1995,
respectively)............................................. 464,516 434,045 405,577
-------- -------- --------
$502,531 $484,045 $431,592
======== ======== ========

The Companies borrow from stockholders and their related entities varying
amounts at 1% above floating prime. These notes are generally unsecured and
payable on demand or in periods of two years or less.

Interest paid on the aforementioned notes payable during 1997, 1996 and
1995 was $50,129, $122,590 and $63,188, respectively.

9. CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Companies to
concentrations of credit risk consist principally of customer accounts
receivables. Concentrations of credit risk with respect to customer receivables
are limited due to the large number of customers comprising the Companies'
customer base and their dispersion across the Metropolitan Atlanta area and
Northeast Georgia. As of December 31, 1997, 1996 and 1995, the companies had no
significant concentrations of credit risk arising from these customer accounts
receivable.

The Companies maintain their cash balances with two financial institutions
located in Atlanta, Georgia. The balances are insured by the Federal Deposit
Insurance Corporation up to $100,000 per dealership at each financial
institution location. At December 31, 1997, 1996 and 1995, the Companies'
uninsured cash balances totaled $747,899, $1,055,457 and $961,156, respectively.

The Companies have on deposit with Ford Motor Credit -- $2,480,000 in Cash
Management Accounts (CMA), as of December 31, 1997. These monies are used to
reduce Ford Motor Credit's balance of the Companies' floor plan notes. These
monies are uninsured.

Balance of CMA at December 31, 1996 -- $2,950,000.

Balance of CMA at December 31, 1995 -- $1,730,000.

10. INTERNAL REVENUE SERVICE EXAMINATION

In 1995, the Internal Revenue Service began an examination of the
Companies' tax returns for the year ended December 31, 1993. In their report,
dated August 30, 1995, the Internal Revenue Service terminated the Companies'
use of the Last-In, First-Out (LIFO) inventory method. This LIFO termination has
been rescinded by the Service and the Companies have agreed to come under the
provisions of Revenue Procedure 97-44. Under this procedure the Companies can
continue to use LIFO but the stockholders were required to pay a penalty to the
Internal Revenue Service.

F-56
183
WADE FORD, INC. AND WADE FORD BUFORD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

11. POTENTIAL SALE

Subsequent to December 31, 1997, the stockholders of the Companies signed
an agreement to sell the stock of the Companies. The agreement is subject to
several conditions, including the manufacturers' approval of change in the
dealerships' management and ownership.

12. MAJOR SUPPLIER

The Companies purchase substantially all of its new vehicles and parts
inventory from Ford Motor Co. at the prevailing prices charged by Ford to all
franchise dealers. The Companies enter into agreements ("Dealer Agreements")
with Ford. The Dealer Agreements generally limit the location of the dealership
and include Ford's approval rights over changes in dealership management and
ownership. Ford is also entitled to terminate the Dealer Agreements if the
dealerships are in material breach of their terms.

13. ADVERTISING

The Companies expense the cost of advertising as incurred. Advertising
expense was $595,629, $832,622 and $695,695 for the years ended December 31,
1997, 1996 and 1995, respectively.

14. GOVERNMENTAL REGULATION

Substantially all of the Companies facilities are subject to federal, state
and local provisions regulating the discharge of materials into the environment.
Compliance with these provisions has not had, nor does the Companies expect such
compliance to have any material effect upon the capital expenditures, net
income, financial condition or competitive position of the Companies. Management
believes that its current practices and procedures of the control and
disposition of such wastes comply with applicable federal and state
requirements.

15. LAWSUIT

Wade Ford, Inc. is a defendant in a lawsuit filed by a customer for alleged
fraudulent misrepresentation. The suit asks for damages totaling $128,000.
Outside counsel from the Company has advised that at this stage in the
proceedings, they cannot offer an opinion as to the probable outcome. Management
intends to vigorously defend this lawsuit. In the opinion of management, the
ultimate liability, if any, resulting from such lawsuit, will not have a
material adverse effect on the operating results, liquidity, or the financial
position of the Company.

16. COMMON STOCK

A summary of common stock follows:

WADE
WADE FORD
FORD, INC. BUFORD COMBINED
---------- -------- --------

Total Value............................................. $ 1,000 $177,788 $178,788
======= ======== ========

Stated value per share.................................. $ 1.00 No par
value
Authorized shares....................................... 10,000 500,000
Shares issued and outstanding........................... 1,000 12,800

F-57
184

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Robertson Oldsmobile-Cadillac, Inc. d/b/a
Moss Robertson Mazda and
Moss Robertson Isuzu

We have audited the accompanying balance sheets of Robertson
Oldsmobile-Cadillac, Inc. d/b/a Moss Robertson Mazda and Moss Robertson Isuzu as
of December 31, 1996 and 1997, and the related statements of income and changes
in retained earnings and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Robertson
Oldsmobile-Cadillac, Inc. d/b/a Moss Robertson Mazda and Moss Robertson Isuzu at
December 31, 1996 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
January 26, 1998

F-58
185

ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

BALANCE SHEETS

DECEMBER 31,
----------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents................................ $2,554,818 $2,168,413 $2,100,295
Accounts receivable...................................... 355,968 258,276 377,162
Inventories.............................................. 2,341,805 2,766,897 2,996,592
Prepaid expenses and other current assets................ 23,114 41,879 44,922
---------- ---------- ----------
Total current assets............................. 5,275,705 5,235,465 5,518,971
Machinery and equipment, net............................... 60,770 46,228 46,252
Intangible assets, net..................................... 117,592 108,122 105,755
---------- ---------- ----------
$5,454,067 $5,389,815 $5,670,978
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Floor plan notes payable................................. $1,921,823 $2,391,254 $2,612,872
Accounts payable......................................... 537,806 290,511 303,046
Accrued liabilities...................................... 45,402 54,072 104,842
Current maturities of long-term debt..................... 7,663 -- --
---------- ---------- ----------
Total current liabilities........................ 2,512,694 2,735,837 3,020,760
Stockholder's equity:
Common stock, $5 par value:
2,000 shares authorized, 1,000 shares issued and
outstanding......................................... 5,000 5,000 5,000
Additional paid in capital............................... 144,500 144,500 144,500
Retained earnings........................................ 2,791,873 2,504,478 2,500,718
---------- ---------- ----------
Total stockholder's equity....................... 2,941,373 2,653,978 2,650,218
---------- ---------- ----------
$5,454,067 $5,389,815 $5,670,978
========== ========== ==========

See accompanying notes.

F-59
186

ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

STATEMENTS OF INCOME AND CHANGES IN RETAINED EARNINGS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- -----------------------
1996 1997 1997 1998
----------- ----------- ---------- ----------
(UNAUDITED)

Revenues:
Vehicle sales............................... $18,781,757 $20,258,720 $4,061,881 $4,910,948
Parts and service........................... 2,499,903 2,778,577 654,458 651,971
Finance, commission and other revenues...... 286,300 473,192 142,225 115,338
----------- ----------- ---------- ----------
21,567,960 23,510,489 4,858,564 5,678,257
Cost of sales:
Vehicle Sales............................... 17,213,988 18,912,247 3,783,784 4,514,911
Parts and service........................... 1,233,144 1,537,189 360,277 356,020
Finance, commission and other revenues...... 69,913 85,988 58,030 47,345
----------- ----------- ---------- ----------
18,517,045 20,535,424 4,202,091 4,918,276
----------- ----------- ---------- ----------
Gross profit.................................. 3,050,915 2,975,065 656,473 759,981
Selling, general and administrative
expenses.................................... 2,195,664 1,956,762 471,564 500,157
----------- ----------- ---------- ----------
Income from operations........................ 855,251 1,018,303 184,909 259,824
Interest expense.............................. 45,365 66,811 15,240 22,345
Interest income............................... 152,541 174,892 40,052 34,890
Other (expense) income, net................... 2,987 (4,779) (2,484) (5,630)
----------- ----------- ---------- ----------
Net income.......................... 965,414 1,121,605 207,237 266,739
Dividends paid................................ (411,930) (1,409,000) (299,999) (270,499)
Retained earnings at beginning of year........ 2,238,389 2,791,873 2,791,873 2,504,478
----------- ----------- ---------- ----------
Retained earnings at end of year.............. $ 2,791,873 $ 2,504,478 $2,699,111 $2,500,718
=========== =========== ========== ==========

See accompanying notes.

F-60
187

ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------- -----------------------
1996 1997 1997 1998
---------- ---------- ---------- ----------
(UNAUDITED)

OPERATING ACTIVITIES
Net income...................................... $ 965,414 $1,121,605 $ 207,237 $ 266,739
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation............................... 50,862 45,027 6,359 3,881
Amortization............................... 9,470 9,470 2,368 2,367
Gain (loss) on sale of machinery and
equipment................................ 4,282 (771) -- --
Changes in assets and liabilities:
Accounts receivable...................... (83,622) 97,692 22,190 (118,886)
Prepaid expenses and other current
assets................................ (3,431) (18,765) (21,752) (3,043)
Inventories.............................. (190,283) (425,092) (479,293) (229,695)
Floor plan notes payable................. 307,442 469,431 507,895 221,618
Accounts payable......................... 206,763 (247,295) (267,762) 12,535
Accrued liabilities...................... (34,023) 8,670 59,757 50,770
---------- ---------- ---------- ----------
Net cash provided by operating
activities.......................... 1,232,874 1,059,972 36,999 206,286
INVESTING ACTIVITIES
Purchases of machinery and equipment............ (48,541) (30,813) (4,356) (3,905)
Proceeds on disposal of machinery and
equipment..................................... -- 1,099 -- --
---------- ---------- ---------- ----------
Net cash used in investing
activities.......................... (48,541) (29,714) (4,356) (3,905)
FINANCING ACTIVITIES
Principal payments on long-term debt............ (17,956) (7,663) (4,707) --
Dividends paid.................................. (411,930) (1,409,000) (299,999) (270,499)
Loans (to) from stockholder, net................ (337,661) -- -- --
Payments of stockholder loans, net.............. 337,661 -- -- --
---------- ---------- ---------- ----------
Net cash used in financing
activities.......................... (429,886) (1,416,663) (304,706) (270,499)
---------- ---------- ---------- ----------
Change in cash and cash equivalents............. 754,447 (386,405) (272,063) (68,118)
Cash and cash equivalents at beginning of the
year.......................................... 1,800,371 2,554,818 2,554,818 2,168,413
---------- ---------- ---------- ----------
Cash and cash equivalents at end of the year.... $2,554,818 $2,168,413 $2,282,755 $2,100,295
========== ========== ========== ==========

See accompanying notes.

F-61
188

ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1997

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF BUSINESS

Robertson Oldsmobile-Cadillac, Inc. d/b/a Moss Robertson Mazda and Moss
Robertson Isuzu (the Company) is principally engaged in the business of selling
and servicing new and used vehicles. The Company operates 4 dealerships in
Gainesville, Georgia consisting of Oldsmobile, Cadillac, Mazda, and Isuzu.

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits in banks,
contracts in transit pertaining to the sale of vehicles, and all highly liquid
investments with an original maturity of three months or less at the date of
purchase. The Company's cash equivalents include $1,664,144 at December 31, 1996
and $1,764,144 at December 31, 1997, which it invested with GMAC as collateral
security for the Company's floor plan notes payable under its security agreement
with GMAC. In consideration, the Company receives a reduction in the interest
charged under the security agreement. So long as the Company is not in default
under its security agreement, it may, upon written request, require GMAC to
return all or a portion of the invested balance to it on the next business day
following receipt by GMAC of the request. The Company's management believes that
there is little, if any, credit risk because its investment may not exceed 75%
of the Company's floor plan notes payable to GMAC.

INVENTORIES

All inventory is stated at the lower of cost or market. Cost of new
vehicles and certain parts and accessories is determined using the last-in,
first-out (LIFO) method. Cost of used vehicles and other parts and accessories
is determined using the first-in, first-out (FIFO) method.

MACHINERY AND EQUIPMENT

Machinery and equipment is stated at cost less accumulated depreciation.
Depreciation is provided predominately using accelerated methods over the
estimated useful lives of the assets ranging from 3 to 7 years.

REVENUE RECOGNITION

Revenues from vehicle and parts sales and from service operations are
recognized at the time the vehicle is delivered to the customer or service is
completed.

Finance fees represent revenue earned by the Company for notes placed with
financial institutions in connection with customer vehicle financing. Finance
fees are recognized in income upon acceptance of the credit by the financial
institution. Insurance income represents commissions earned on credit life,
accident and disability insurance sold in connection with a vehicle on behalf of
third-party insurance companies. Insurance commissions are recognized in income
upon customer acceptance of the insurance terms as evidenced by

F-62
189
ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

contract execution. The Company is charged back a portion of fees and
commissions earned on finance or insurance contracts if the customer terminates
a contract prior to its scheduled maturity.

INTANGIBLES

Intangibles consists of goodwill that represents the excess of cost over
assigned fair market value of a dealership acquired and is being amortized on a
straight-line basis over its estimated useful life, not exceeding 40 years.
Accumulated amortization was $24,464 and $33,934 at December 31, 1996 and 1997,
respectively. The carrying amount of the intangible is reviewed if facts and
circumstances suggest that it may be impaired. If this review indicates that the
asset will not be recoverable, as determined based on the estimated undiscounted
cash flows of the entity acquired over the remaining amortization period, the
carrying amount of the asset is reduced by the estimated shortfall of discounted
cash flows.

INCOME TAXES

The Company has elected to be taxed under the provisions of Subchapter S of
the Internal Revenue Code. Under those provisions, the Company does not pay
federal or state corporate income taxes. Instead, the stockholders are liable
for individual federal and state income taxes on their respective shares of the
Company's taxable income.

The pro forma provision for federal and state income taxes for the years
ended December 31, 1996 and 1997 would be $367,408 and $428,301, respectively.
The pro forma provision reflects amounts that would have been recorded had the
Company's income been taxed for state and federal purposes as if it were a C
Corporation.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of contracts in transit and
accounts receivable. Also, at times, cash deposits in banks exceed the Federal
Deposit Insurance Corporation insurance limit. Contracts in transit are for
funds received shortly after balance sheet date from contracts financed with
financial institutions. Trade receivables principally result from extending
short-term credit to a large number of customers and other automotive dealers
located in the North Georgia area. Finance companies receivables are commissions
on credit contracts of customers. Receivables also result from transactions with
automotive manufacturers. Although the Company is directly affected by the
economic conditions in the automotive industry, financial institutions, banks,
its customers and the general economy of the Gainesville, Georgia area,
management does not believe significant credit risk exists.

MAJOR SUPPLIER

F-63
190
ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ADVERTISING

The Company expenses the cost of advertising as incurred. Advertising
expense was $122,509 and $82,276 for the years ended December 31, 1996 and 1997,
respectively.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company considers the carrying amounts of significant classes of
financial instruments on the balance sheet, including cash and contracts in
transit, floor plan notes payable and long-term debt to be reasonable estimates
of fair value. Fair value of the Company's debt was estimated using discounted
cash flow analysis, based on the Company's current incremental borrowing rates
for similar types of arrangements.

INTERIM FINANCIAL STATEMENTS

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-------------------
1996 1997
-------- --------

Parts, service and wholesale................................ $ 77,610 $ 42,974
Vehicle receivables......................................... 119,152 35,766
Factory..................................................... 147,141 156,182
Finance companies........................................... 6,010 17,232
Employees and shareholder................................... 6,055 6,122
-------- --------
$355,968 $258,276
======== ========

3. INVENTORIES

Inventories consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-----------------------
1996 1997
---------- ----------

New vehicles................................................ $1,944,514 $2,587,395
Used vehicles............................................... 676,534 494,600
Parts, accessories and other................................ 144,813 123,856
---------- ----------
2,765,861 3,205,851
Less LIFO reserve........................................... (424,056) (438,954)
---------- ----------
$2,341,805 $2,766,897
========== ==========

F-64
191
ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. MACHINERY AND EQUIPMENT

A summary of machinery and equipment is as follows as of December 31, 1996
and 1997:

DECEMBER 31,
-------------------
1996 1997
-------- --------

Machinery and shop equipment................................ $261,726 $259,818
Furniture and fixtures...................................... 250,106 268,765
Parts and accessories equipment............................. 27,972 32,525
Company vehicle............................................. 14,048 14,048
-------- --------
553,852 575,156
Less accumulated depreciation............................... 493,082 528,928
-------- --------
$ 60,770 $ 46,228
======== ========

5. FLOOR PLAN NOTES PAYABLE

Floor plan notes payable consist of a note payable with a financial
institution. Floor plan notes payable are secured by certain new and used
vehicles. The floor plan arrangement permits the Company to borrow up to
$6,475,000, restricted by new and used vehicle levels. The notes are generally
due within ten days of the vehicle being sold or after the vehicle has been in
inventory for one year for new vehicles and after three months for used
vehicles.

The notes bear interest based on contractual rates which ranged from
approximately 8.5% to 8.25% at December 31, 1996 and 1997. During 1996 and 1997,
total cash paid for interest on floor plan notes payable and long-term debt was
$44,057 and $66,674, respectively. Interest expense related to floor plan notes
payable was reduced by manufacturer floor plan allowances and credits of
$155,437 and $193,925 for 1996 and 1997, respectively.

6. ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-----------------
1996 1997
------- -------

Accrued payroll............................................. $43,841 $51,131
Accrued taxes............................................... 1,250 2,502
Other accrued liabilities................................... 311 439
------- -------
$45,402 $54,072
======= =======

7. LONG-TERM DEBT

A summary of long-term debt as of December 31, 1997 and 1996 is as follows:

DECEMBER 31,
----------------
1996 1997
------ -------

Note payable; bearing interest at 7.5%, payable monthly,
balance paid in full June 1997............................ $7,663 $ --
Less current maturities of long-term debt................... 7,663 --
------ -------
$ -- $ --
====== =======

F-65
192
ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. COMMITMENTS AND TRANSACTIONS WITH RELATED PARTIES

The Company is obligated to stockholder of the Company under certain
non-cancelable leases. The Company has an option to renew this lease for an
additional five year period with rent renegotiated at that time but in no event
for less than rent payable at March 31, 2005. These leases, which cover the
lease of certain buildings, land and equipment provide for the following
payments:

1998........................................................ $ 180,000
1999........................................................ 180,000
2000........................................................ 202,500
2001........................................................ 210,000
2002........................................................ 210,000
Thereafter.................................................. 472,500
----------
Total minimum payments...................................... $1,455,000
==========

Total rent expense for leases with related parties for the years ended
December 31, 1996 and 1997 was $149,600 and $180,000, respectively.

The Company is a guarantor of a mortgage secured by the leased property
referred to above. At December 31, 1996 and 1997, the unpaid balance of the
mortgage amounted to $976,561 and $932,448, respectively. Until full payment and
performance of all obligations of the borrower under the loan, borrower and
guarantor must maintain certain financial ratios and covenants. Failure to do so
would result in a default under the terms of the mortgage loan agreement. It is
not practical to estimate the fair value of the above guarantee, however, the
Company does not expect to incur any significant losses as a result of this
guarantee.

During 1996, the stockholder of the Company borrowed $480,661 from the
Company and repaid it, including interest. In addition, the Company borrowed
$143,000 from the stockholder during 1996, which was also repaid including
interest.

9. GOVERNMENTAL REGULATION

Substantially all of the Company's facilities are subject to federal, state
and local provisions regulating the discharge of materials into the environment.
Compliance with these provisions has not had, nor does the Company expect such
compliance to have any material effect upon the capital expenditures, net
income, financial condition or competitive position of the Company. Management
believes that its current practices and procedures for the control and
disposition of such wastes comply with applicable federal and state
requirements.

10. EMPLOYEE BENEFIT PLAN

The Company has an employee savings plan under Section 401(k) of the
Internal Revenue Code. This plan covers substantially all full time employees
that have been employed by the Company for one year and work at least 1,000
hours annually. Generally, employees can defer from 2% to 15% of their
compensation and the Company can make matching contributions of a designated
percentage at the Company's discretion. The amount charged against income for
the Company's contributions to the plan for the years ended December 31, 1996
and 1997 was $16,105 and $15,248, respectively.

F-66
193
ROBERTSON OLDSMOBILE-CADILLAC, INC. D/B/A
MOSS ROBERTSON MAZDA AND
MOSS ROBERTSON ISUZU

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

11. SUBSEQUENT EVENT

Subsequent to December 31, 1997, the stockholder of the Company signed an
agreement to sell the stock of the Company. The agreement is subject to several
conditions, including the manufacturers' approval of change in dealership
management and ownership.

F-67
194

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Day's Chevrolet, Inc.

We have audited the accompanying balance sheets of Day's Chevrolet, Inc. as
of December 31, 1996 and 1997, and the related statements of income and changes
in retained earnings and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Day's Chevrolet, Inc. at
December 31, 1996 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
March 26, 1998

F-68
195

DAY'S CHEVROLET, INC.

BALANCE SHEETS

DECEMBER 31,
------------------------- MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................. $ 917,181 $ 1,287,204 $ 1,447,609
Accounts receivable................................... 707,353 849,913 835,636
Inventories........................................... 8,095,756 8,113,893 7,787,102
Prepaid expenses and other current assets............. 8,935 5,862 4,763
----------- ----------- -----------
Total current assets.......................... 9,729,225 10,256,872 10,075,110
Property and equipment, net............................. 2,224,636 249,898 271,784
Other assets............................................ 116,715 104,699 322,611
----------- ----------- -----------
$12,070,576 $10,611,469 $10,669,505
=========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Floor plan notes payable.............................. $ 7,864,591 $ 9,102,706 $ 8,975,041
Note payable.......................................... 273,295 -- --
Accrued liabilities................................... 199,455 310,644 265,068
Accounts payable...................................... 482,918 333,965 229,553
----------- ----------- -----------
Total current liabilities..................... 8,820,259 9,747,315 9,469,662
Stockholders' equity:
Class A voting common stock, $1 par value, 500,000
shares authorized, 110,000 shares issued and
outstanding........................................ 110,000 110,000 110,000
Additional paid-in capital............................ 32,344 32,344 32,344
Retained earnings..................................... 3,107,973 721,810 1,057,499
----------- ----------- -----------
Total stockholders' equity.................... 3,250,317 864,154 1,199,843
----------- ----------- -----------
$12,070,576 $10,611,469 $10,669,505
=========== =========== ===========

See accompanying notes.

F-69
196

DAY'S CHEVROLET, INC.

STATEMENTS OF INCOME AND CHANGES IN RETAINED EARNINGS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- -------------------------
1996 1997 1997 1998
----------- ----------- ----------- -----------
(UNAUDITED)

Revenues:
Vehicle sales............................. $48,996,779 $50,587,196 $12,422,737 $11,856,249
Parts and service......................... 9,525,159 9,339,883 2,218,446 2,348,378
Finance, commission and other revenues.... 1,489,104 1,404,902 327,307 390,916
----------- ----------- ----------- -----------
60,011,042 61,331,981 14,968,490 14,595,543
Cost of sales:..............................
Vehicle sales............................. 46,165,607 48,091,556 11,782,331 11,258,605
Parts and service......................... 6,580,364 6,453,453 1,559,829 1,594,034
Finance, commission and other revenues.... 491,187 548,945 118,524 136,160
----------- ----------- ----------- -----------
53,237,158 55,093,954 13,460,684 12,988,799
----------- ----------- ----------- -----------
Gross profit................................ 6,773,884 6,238,027 1,507,806 1,606,744
Selling, general and administrative
expenses.................................. 5,076,021 5,178,182 1,235,273 1,258,291
----------- ----------- ----------- -----------
Income from operations...................... 1,697,863 1,059,845 272,533 348,453
Interest expense............................ 124,764 101,739 35,621 19,952
Interest income............................. 1,888 2,311 578 610
Other income (expense), net................. 7,365 5,812 552 6,578
----------- ----------- ----------- -----------
Net income........................ 1,582,352 966,229 238,042 335,689
Distributions to stockholders............... (989,245) (3,352,392) -- --
Retained earnings at beginning of year...... 2,514,866 3,107,973 3,107,973 721,810
----------- ----------- ----------- -----------
Retained earnings at end of year............ $ 3,107,973 $ 721,810 $ 3,346,015 $ 1,057,499
=========== =========== =========== ===========

See accompanying notes.

F-70
197

DAY'S CHEVROLET, INC.

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- -------------------------
1996 1997 1997 1998
----------- ----------- ----------- -----------
(UNAUDITED)

OPERATING ACTIVITIES
Net income.................................. $ 1,582,352 $ 966,229 $ 238,042 $ 335,689
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation.............................. 242,590 194,795 31,812 30,039
Gain on disposal of property and
equipment.............................. (1,008) -- -- --
Changes in assets and liabilities:
Accounts receivable.................... (31,583) (142,560) (1,196) 14,277
Inventories............................ (752,170) (18,137) 2,304,166 326,791
Prepaid expenses and other current
assets............................... 854 3,073 (558,598) 1,099
Other assets........................... 10,171 12,016 (644,490) (217,912)
Floor plan notes payable............... 414,653 1,238,115 (2,022,604) (127,665)
Accounts payable and accrued
liabilities.......................... 27,158 (37,764) (27,119) (149,988)
----------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities............ 1,493,017 2,215,767 (679,987) 212,330
INVESTING ACTIVITIES
Purchases of property and equipment......... (332,027) (52,611) (8,630) (51,925)
Proceeds on disposal of property and
equipment................................. 188,290 31,483 16,868 --
----------- ----------- ----------- -----------
Net cash used in investing
activities...................... (143,737) (21,128) 8,238 (51,925)
FINANCING ACTIVITIES
Principal payments on note payable.......... (252,288) (273,295) 336,944 --
Dividends paid.............................. (989,245) (1,551,321) -- --
----------- ----------- ----------- -----------
Net cash used in financing
activities...................... (1,241,533) (1,824,616) 336,944 --
----------- ----------- ----------- -----------
Increase (decrease) in cash and cash
equivalents............................... 107,747 370,023 (334,805) 160,405
Cash and cash equivalents at beginning of
the year.................................. 809,434 917,181 917,181 1,287,204
----------- ----------- ----------- -----------
Cash and cash equivalents at end of the
year...................................... $ 917,181 $ 1,287,204 $ 582,376 $ 1,447,609
=========== =========== =========== ===========

See accompanying notes.

F-71
198

DAY'S CHEVROLET, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1997

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF BUSINESS

Day's Chevrolet, Inc. (the Company) is principally engaged in the business
of selling and servicing new and used vehicles. The Company operates a Chevrolet
dealership in Acworth, Georgia.

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful accounts is based on historical bad debt
experience and management's periodic evaluation of individual accounts.

INVENTORIES

REVENUE RECOGNITION

F-72
199
DAY'S CHEVROLET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY AND EQUIPMENT

Buildings................................................... 15-20 years
Furniture and fixtures...................................... 5-7 years
Leasehold improvements...................................... 5-18 years
Machinery and shop equipment................................ 5-12 years
Rental cars................................................. 3 years

INCOME TAXES

The pro forma provision for federal and state income taxes for the years
ended December 31, 1996 and 1997 would be $608,227 and $640,359, respectively.
The pro forma provision reflects amounts that would have been recorded had the
Company's income been taxed for state and federal purposes as if it were a C
Corporation.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of contracts in transit and
accounts receivable. Also, at times, cash deposits in banks exceed the Federal
Deposit Insurance Corporation insurance limit. Contracts in transit are for
funds received shortly after the balance sheet date from contracts financed with
financial institutions. Trade receivables principally result from extending
short-term credit to a large number of customers and other automotive dealers
located in the metropolitan Atlanta, Georgia area. Finance companies receivables
are commissions on credit contracts of customers. Receivables also result from
transactions with automotive manufacturers. Although the Company is directly
affected by the economic conditions in the automotive industry, financial
institutions, banks, its customers and the general economy of the metropolitan
Atlanta, Georgia area, management does not believe significant credit risk
exists.

MAJOR SUPPLIER

The Company purchases substantially all of its new vehicles and parts
inventory from automobile manufacturers/distributors at the prevailing prices
charged by the manufacturers/distributors to all franchise dealers. The Company
entered into an agreement ("Dealer Agreement") with the manufacturer. The Dealer
Agreement generally limits the location of the dealership and includes
manufacturer approval rights over changes in dealership management and
ownership. The manufacturer is also entitled to terminate the Dealer Agreement
if the dealership is in material breach of its terms.

ADVERTISING

The Company expenses the cost of advertising as incurred. Advertising
expense was $379,209 and $393,487 for the years ended December 31, 1996 and
1997, respectively.

F-73
200
DAY'S CHEVROLET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company considers the carrying amounts of significant classes of
financial instruments on the balance sheet, including cash and contracts in
transit and note payable to be reasonable estimates of fair value. Fair value of
the Company's debt was estimated using discounted cash flow analysis, based on
the Company's current incremental borrowing rates for similar types of
arrangements.

INTERIM FINANCIAL STATEMENTS

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-------------------
1996 1997
-------- --------

Parts, service and wholesale................................ $494,572 $547,203
Factory..................................................... 173,143 234,851
Finance companies........................................... 38,348 65,407
Employees................................................... 1,290 2,452
-------- --------
$707,353 $849,913
======== ========

3. INVENTORIES

Inventories consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-----------------------
1996 1997
---------- ----------

New vehicles................................................ $6,443,653 $7,297,211
Used vehicles............................................... 2,484,732 2,000,929
Parts, accessories and other................................ 645,131 608,065
---------- ----------
9,573,516 9,906,205
Less LIFO reserve........................................... 1,477,760 1,792,312
---------- ----------
$8,095,756 $8,113,893
========== ==========

F-74
201
DAY'S CHEVROLET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT

During 1997, the Company made a distribution of land and buildings to the
stockholders. This is described further in Note 8. A summary of plant and
equipment is as follows as of December 31, 1996 and 1997:

DECEMBER 31,
-----------------------
1996 1997
---------- ----------

Land........................................................ $ 496,906 $ --
Buildings................................................... 1,948,790 --
Machinery and shop equipment................................ 434,448 437,768
Furniture and fixtures...................................... 297,914 306,321
Rental cars and company vehicles............................ 410,944 414,515
---------- ----------
3,589,002 1,158,604
Less accumulated depreciation............................... 1,364,366 908,706
---------- ----------
$2,224,636 $ 249,898
========== ==========

5. FLOOR PLAN NOTES PAYABLE

Floor plan notes payable consist of a note payable with a financial
institution. Floor plan notes payable are secured by certain new and used
vehicles. The floor plan arrangement permits the Company to borrow up to
$11,000,000 for 1996 and 1997, restricted by new and used vehicle levels. The
notes are generally due within ten days of the vehicle being sold or after the
vehicle has been in inventory for one year for new vehicles and after three
months for used vehicles.

The notes bear interest based on contractual rates which were 9.25% and
9.5% at December 31, 1996 and 1997, respectively. During 1996 and 1997, total
cash paid for interest on floor plan notes payable and note payable was $124,764
and $101,739, respectively.

6. NOTE PAYABLE

The Company's note payable to GMAC, bearing interest at 9.25%, payable
monthly, was paid in full in December 1997.

7. ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31, 1996 and 1997:

DECEMBER 31,
-------------------
1996 1997
-------- --------

Salaries, wages, bonus and vacation......................... $ -- $ 150
Finance reserve............................................. 50,000 50,000
Other accrued liabilities................................... 149,455 260,494
-------- --------
$199,455 $310,644
======== ========

8. COMMITMENTS AND TRANSACTIONS WITH RELATED PARTIES

The Company declared a dividend of its land and buildings which was
transferred to the stockholder, effective September 1, 1997. The land and
buildings were transferred at book values of $496,906 and $1,318,665,
respectively. In addition, the Company leased certain land and buildings from
the stockholders, effective September 1, 1997. The lease, which is cancelable by
either the Company or the stockholders at any

F-75
202
DAY'S CHEVROLET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. COMMITMENTS AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

time prior to its expiration in February 1999, requires monthly payments of
$21,667. At December 31, 1997, the Company owed the stockholders $86,667 for
rent relating to this lease.

9. GOVERNMENTAL REGULATION

10. EMPLOYEE BENEFIT PLAN

The Company has an employee savings plan under Section 401(k) of the
Internal Revenue Code. This plan covers substantially all full time employees.
The Company matches the employees' contributions of up to four percent of
compensation at the rate of $0.25 per $1.00. The Company's contributions
generally vest over 6 years. The amount charged against income for the Company's
contributions to the plan for the years ended December 31, 1996 and 1997 was
$3,646 and $4,749, respectively.

11. SUBSEQUENT EVENT

F-76
203

INDEPENDENT AUDITORS' REPORT

To the Stockholder
South Financial Corporation
Gainesville, Florida

We have audited the accompanying balance sheets of South Financial
Corporation as of December 31, 1997 and 1996, and the related statements of
operations and retained earnings, and cash flows for the years ended December
31, 1997, 1996 and 1995. These financial statements are the responsibility of
South Financial Corporation's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of South Financial Corporation
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years ended December 31, 1997, 1996 and 1995, in conformity with
generally accepted accounting principles.

/s/ DAVIS, MONK & COMPANY

Gainesville, Florida
February 12, 1998

F-77
204

SOUTH FINANCIAL CORPORATION

BALANCE SHEETS
DECEMBER 31, 1997 AND 1996

1997 1996
----------- -----------

ASSETS
Finance receivables, net.................................... $12,846,772 $17,141,343
Cash........................................................ 64,076 4,184
Other receivables........................................... 38,131 45,089
Due from affiliated companies............................... -- 350,000
Repossessions in liquidation................................ 309,587 --
Property and equipment, net................................. 225,980 286,816
Deposits.................................................... 19,991 22,101
Prepaid expenses............................................ -- 10,022
----------- -----------
Total assets...................................... $13,504,537 $17,859,555
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Contractual obligations payable to dealers on finance
contracts.............................................. $ 726,678 $ 3,919,205
Senior debt............................................... 11,461,888 11,647,230
Subordinated debt......................................... 294,872 967,430
Accounts payable and accrued expenses..................... 93,769 16,771
Deferred tax liability, net............................... 266,486 405,746
----------- -----------
Total liabilities................................. 12,843,693 16,956,382
Stockholder's Equity:
Common stock, $.05 par value per share, 10,000 shares
authorized, 1 share issued and outstanding............. 1 1
Additional paid-in capital................................ 654 654
Retained earnings......................................... 660,189 902,518
----------- -----------
Total stockholder's equity........................ 660,844 903,173
----------- -----------
Total liabilities and stockholder's equity........ $13,504,537 $17,859,555
=========== ===========

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

F-78
205

SOUTH FINANCIAL CORPORATION

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1997 1996 1995
---------- ---------- ----------

Revenues:
Interest, fees and loan discount income.................. $4,631,852 $5,447,343 $3,165,858
Insurance commissions.................................... 110,814 275,749 21,430
---------- ---------- ----------
Total revenues................................... 4,742,666 5,723,092 3,187,288
Expenses and losses:
Interest expense......................................... 1,420,125 1,416,083 978,003
Salaries and personnel costs............................. 2,063,241 2,091,580 1,192,368
Dealer incentives........................................ -- 8,830 13,397
Loss on asset disposals.................................. 20,151 -- --
Depreciation............................................. 67,004 58,042 28,702
Other operating expenses................................. 758,618 882,507 545,071
Provision for credit losses.............................. 795,116 525,281 --
---------- ---------- ----------
Total expenses and losses........................ 5,124,255 4,982,323 2,757,541
---------- ---------- ----------
Income (loss) before income taxes.......................... (381,589) 740,769 429,747
Income tax benefit (expense)............................... 139,260 (306,949) (150,548)
---------- ---------- ----------
Net income (loss)................................ (242,329) 433,820 279,199
Retained earnings, beginning of year, as previously
reported................................................. 902,518 468,698 103,738
Prior period adjustment.................................... -- -- 85,761
---------- ---------- ----------
Retained earnings, beginning of year, as restated.......... 902,518 468,698 189,499
---------- ---------- ----------
Retained earnings, end of year............................. $ 660,189 $ 902,518 $ 468,698
========== ========== ==========

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

F-79
206

SOUTH FINANCIAL CORPORATION

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1997 1996 1995
------------ ------------ ------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss).................................... $ (242,329) $ 433,820 $ 279,199
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Provision for credit losses........................ 795,116 525,281 --
Loss on asset disposal............................. 20,151 -- --
Depreciation....................................... 67,004 58,042 28,702
Deferred taxes..................................... (139,260) 204,159 (75,521)
Changes in:
Unearned income................................. (1,080,484) 1,112,404 --
Other receivables and assets.................... 19,090 (40,998) (308,923)
Due from affiliated companies................... -- 64,861 63,356
Contractual obligations payable to dealers...... (1,301,293) (1,221,267) 1,703,128
Due to affiliated companies..................... -- 39,535 --
Accounts payable and accrued expenses........... 76,998 (20,413) 13,031
Income taxes.................................... -- -- 205,751
------------ ------------ ------------
Net cash provided by (used in) operating
activities............................... (1,785,007) 1,155,424 1,908,723
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Finance contracts originated......................... (9,305,267) (12,231,702) (16,288,429)
Principal payments received on finance contracts..... 11,684,385 7,502,004 8,896,552
Advances to affiliated companies..................... -- -- (894,747)
Payments received from affiliated companies.......... -- -- 656,412
Acquisition of property and equipment................ (26,319) (128,778) (188,861)
------------ ------------ ------------
Net cash provided by (used in) investing
activities............................... 2,352,799 (4,858,476) (7,819,073)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments to investors................................ (139,853) (49,810) (118,651)
Advances from investors.............................. -- 37,926 768,482
Borrowings from lending institutions................. 12,193,000 16,839,000 13,833,242
Payments to lending institutions..................... (12,378,342) (13,354,994) (8,545,019)
Net advances from stockholder........................ -- 170,441 58,491
Net payments to stockholder.......................... (182,705) -- (41,331)
------------ ------------ ------------
Net cash provided by (used in) financing
activities............................... (507,900) 3,642,563 5,955,214
------------ ------------ ------------
Net increase (decrease) in cash............ 59,892 (60,489) 44,864
Cash, beginning of year.............................. 4,184 64,673 19,809
------------ ------------ ------------
Cash, end of year.................................... $ 64,076 $ 4,184 $ 64,673
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest (none capitalized)........................ $ 1,420,125 $ 1,416,083 $ 992,341
============ ============ ============
Income taxes....................................... $ -- $ 40,510 $ 20,500
============ ============ ============

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

F-80
207

SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

South Financial Corporation (SFC) is a finance company licensed by the
State of Florida as a sales finance company. It has one stockholder, Mr. Thomas
Murphy (the Stockholder). In January, 1998, the Stockholder sold 100% of his
interest in SFC to Boomershine, Inc. of Atlanta, Georgia.

The primary business conducted by SFC is to purchase from retail automobile
dealers (dealers) sales contracts of substandard credit arising from the sale of
used automobiles. At December 31, 1997, dealers are located in Florida (62%),
North Carolina (21%) and Tennessee (17%). Beginning in 1997, the receivables are
purchased without recourse. However, prior to 1997, some receivables were
purchased with recourse. Such contracts are obtained after advancing the dealer
25% to 75% of the principal amount financed on installment sales contracts. As
collateral for each receivable purchased, SFC obtains a security interest in the
vehicle. In the event of default, SFC has the right to take possession of the
vehicle. At that time, SFC has the right to resell the vehicle at a public or
private sale. Contract terms average approximately 35 months and do not exceed
48 months.

FINANCE RECEIVABLES

Finance receivables are carried at the sales contract's unpaid balance
including finance charges. Deferred loan costs are added to the receivable
balance. Deferred finance income, deferred commissions on credit life, deferred
origination fees and purchase discounts are deducted from the balance of finance
receivables. Any discounts on contracts acquired by SFC for less than the face
value are amortized to income over the period of the payments to be received
using the interest method.

When contracts are purchased, the allowance for loan losses is increased by
a portion of the purchase discount. The allowance is decreased by the amount of
chargeoffs, net of recoveries on repossessed collateral. Management records a
charge to income when the allowance is not considered sufficient to cover
estimated losses in the portfolio. In evaluating the level of the allowance for
loan losses, management considers the existence of impairment in the loan
portfolio. This analysis is performed at the portfolio level as the loans in the
portfolio are smaller balance, homogeneous loans to customers. Management's
periodic estimates of the adequacy of the allowance are based on past loan loss
experience, known and inherent risks in the portfolio, adverse situations that
may affect the borrower's ability to repay, the estimated value of any
underlying collateral and current economic conditions. It is reasonably possible
that these estimates could be revised due to changes in the related
circumstances.

For approximately 30% of the portfolio at December 31, 1997, SFC has
agreements with the automobile dealers that contain terms to hold the dealer
responsible for all defaults on related installment contracts. When management
believes that collectibility of these loans is unlikely, losses are first
charged against any obligation payable to dealers.

CASH

Cash consists solely of bank deposits which are fully insured by the
Federal Deposit Insurance Corporation.

PROPERTY AND EQUIPMENT AND DEPRECIATION

Property and equipment is recorded at cost. Depreciation is provided over
the estimated useful lives of the related assets using the straight-line method.

F-81
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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REPOSSESSIONS IN LIQUIDATION

Repossessions in liquidation are carried at the vehicle's fair value minus
estimated costs to sell. They represent contracts that have been charged off and
where SFC is proceeding to repossess the vehicle. SFC estimates the carrying
value of repossessions based on historical averages of the number of vehicles
that can be repossessed and the net amount that can be recovered.

CONTRACTUAL OBLIGATIONS PAYABLE TO DEALERS

In addition to advancing to dealers from 25% to 75% of principal amounts
financed, prior to 1997, SFC entered into arrangements with dealers whereby
reserves are established to protect SFC from potential losses associated with
financing of sales finance contracts. As part of SFC's agreement with the
dealers, a portion of the proceeds of finance contracts is retained by SFC and
is available to SFC to offset any losses on specific accounts.

LOAN ORIGINATION FEES AND INSURANCE COMMISSIONS

Fees received and direct costs incurred for the origination of loans as
well as insurance commissions on credit life policies are deferred and amortized
to interest income over the contractual lives of the loans using the interest
method. Insurance commissions on warranty policies are deferred and amortized
over the life of the insurance policy (6 months). Unamortized fee and commission
income amounts are recognized in income at the time the loans are sold or paid
in full.

INCOME TAXES

Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of deferred taxes related primarily to
differences between the basis of finance receivables for financial and income
tax reporting. The deferred tax assets and liabilities represent the future tax
return consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled. Deferred
taxes are also recognized for operating losses that are available to offset
future taxable income.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires SFC to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could vary from the estimates that were used.

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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. FINANCE RECEIVABLES

The following schedule displays contractual annual maturities of retail
automobile contracts, including interest, and a reconciliation of total
contracts receivable to net finance receivables reported on the balance sheets.

1997 1996
----------- -----------

Due Within:
One year.................................................. $10,660,721 $11,111,293
Two years................................................. 7,135,926 7,412,544
Three years............................................... 2,662,948 3,885,017
Four years................................................ 146,003 575,862
----------- -----------
Total............................................. 20,605,598 22,984,716
Unearned finance income................................... (4,769,768) (5,739,915)
Unearned insurance commissions............................ (80,632) (103,458)
Unearned discount income.................................. (959,529) --
Deferred loan origination costs........................... 87,511 --
----------- -----------
Amortized cost of contracts financed...................... 14,883,180 17,141,343
Allowance for doubtful accounts........................... (2,036,408) --
----------- -----------
Finance receivables, net.................................. $12,846,772 $17,141,343
=========== ===========

Because a certain portion of contracts receivable will be repaid before or
extended after the contractual maturity dates or charged back to dealers, the
annual maturities stated are not to be regarded as a forecast of future cash
collections. At December 31, 1997, 1996 and 1995, accrued interest income of
$370,246, $321,616 and $112,844, respectively, was included in the finance
receivable balance. Approximately 3,940, 4,100 and 3,500 contracts were being
serviced by SFC at December 31, 1997, 1996 and 1995, respectively.

Contracts deemed uncollectible by management are first charged back to
balances owed by SFC to dealers, if any. Any excess of uncollectible amounts
over amounts due to dealers is charged to the provision for credit losses. The
amount of contracts written off in 1997, 1996 and 1995, net of recoveries, was
$7,285,753 (including $677,564 pertaining to chargebacks against dealers under
recourse arrangements), $10,165,878 and $4,832,587, respectively. This amount
approximated 16.8% and 21% of the gross value of contracts (principal and
interest) owned and originated in 1997 and 1996, respectively. SFC incurred
credit losses of $795,116 in 1997 and $525,281 in 1996 as a result of the above
mentioned charge backs.

The following schedule displays the change in allowance for doubtful
accounts during 1997:

Beginning balance........................................... $ --
Provision for credit losses................................. 795,116
Allocation of unearned discount............................. 7,849,481
Charge offs, net of recoveries.............................. (6,608,189)
-----------
$ 2,036,408
===========

Prior to 1997, finance receivables were purchased from dealers on (a) a
recourse basis or (b) subject to a holdback arrangement whereby an agreed-upon
percentage of the loan purchase price was retained (held back) by SFC. This
holdback amount was used by SFC to offset future credit losses in the portfolio
of loans purchased from each dealer.

Early in 1997, SFC began purchasing finance receivables solely on a
non-recourse discount basis. Under this arrangement, SFC purchases the
receivables at a discount with no future obligation to the dealers. In addition,
since the receivable are non-recourse, SFC retains full risk for any credit
loss.

F-83
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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. FINANCE RECEIVABLES (CONTINUED)

Management of SFC periodically assesses whether the recourse and holdback
arrangements adequately provide for anticipated credit losses. As a result of
the change in the mix of loan types originated and purchased by SFC, management
established an allowance for doubtful accounts in early 1997 to cover potential
credit losses in its existing loan portfolio. The timing of this event coincided
with SFC's decision to purchase finance receivables on the non-recourse discount
basis.

Since 1996, finance receivables subject to dealer recourse are charged
against the allowance for doubtful accounts when and if the dealer is unwilling
or unable to meet its recourse obligation. Finance receivables subject to a
holdback reserve arrangement are charged against the allowance for doubtful
accounts when the cumulative loss per dealer exceeds the amount in holdback for
that dealer.

Prior to 1997, credit losses on recourse deals were generally recovered
from the dealer. On holdback deals, credit losses reduced the holdback amounts
due to the dealer. Losses were recognized 1) for recourse deals, when the dealer
did not meet its obligation and 2) for holdback deals, when the cumulative loss
per dealer exceeded the amount in holdback for that dealer.

Finance receivables purchased on a non-recourse discount basis are charged
off against the allowance for doubtful accounts when the amount exceeds 60 days
past due or earlier if management concludes that collection is unlikely.

Amounts charged back to dealers under recourse arrangements totaled
$1,853,845 and $677,564 in 1996 and 1997, respectfully.

The following is a presentation of the components of the finance
receivables as of the date indicated:

AS OF DECEMBER 31,
-------------------------
1997 1996
----------- -----------

Dealer recourse receivables................................. $ 1,126,862 $ 2,150,288
Holdback receivables........................................ 3,636,134 14,991,055
Non-recourse discount receivables........................... 10,120,184 --
----------- -----------
$14,883,180 $17,141,343
=========== ===========

3. PROPERTY AND EQUIPMENT

ESTIMATED USEFUL
LIFE IN YEARS 1997 1996
---------------- --------- ---------

Furniture and fixtures........................ 5-7 $ 137,569 $ 178,445
Leasehold improvements........................ 7 149,970 140,672
Computer equipment............................ 5 69,782 69,781
--------- ---------
357,321 388,898
Less: Accumulated depreciation................ (131,341) (102,082)
--------- ---------
Property and Equipment, net......... $ 225,980 $ 286,816
========= =========

4. SENIOR DEBT

Senior debt is comprised of the following at December 31:

1997 1996
----------- -----------

Secured revolving note payable to General Electric Capital
Corporation (G. E. Capital)............................... $11,461,888 $11,647,230
=========== ===========

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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. SENIOR DEBT (CONTINUED)

The G.E. Capital revolving credit note is secured by finance contracts
assigned to G.E. Capital as well as all other assets of SFC. All contract
collections are remitted directly to G.E. Capital and applied towards the
outstanding loan balance. Under the loan and security agreement, SFC may borrow
up to $15,000,000 by obtaining advances of 90% on SFC's net investment in all
eligible finance contracts. The loan, which is guaranteed by the stockholder,
matures September 18, 1998, with provision for automatic annual renewals unless
terminated by either party. The loan bears interest at the LIBOR rate plus 5.1%
and 5.6%, which resulted in a rate of 10.81% and 10.997% at December 31, 1997
and 1996, respectively.

Primarily due to reserve adjustments made at year end December 31, 1997,
SFC was unable to meet certain financial ratio covenants and was in violation of
its credit agreement with G.E. Capital. Provisions of the credit agreement state
that in event of default, G. E. Capital has the option to make all notes and
loans due and owing immediately and to seize control of all assets to liquidate
these obligations. In a letter dated February 25, 1998, G. E. Capital has waived
compliance with the following covenants effective for the period from December
31, 1997 through June 1, 1998:

Debt ratio not to exceed 4.3 to 1
Interest coverage of at least 1.5 to 1

Management plans to receive additional capital contributions from its parent
company and expects that interest coverage will be adequate due to improved
operations.

5. SUBORDINATED DEBT

The following obligations have no stated maturities. Payment of principal
is postponed and subordinated to all payment obligations of SFC under the G. E.
Capital loan.

1997 1996
-------- --------

Note payable to Investors Equity Corporation................ $291,122 $353,514
Note payable to HW Investments.............................. -- 350,000
Due to stockholder.......................................... 3,750 186,455
Due to South Funding Corporation............................ -- 39,535
Note payable to Ed Tillman Auto Sales on Cassat, Inc........ -- 37,926
-------- --------
Total subordinated debt........................... $294,872 $967,430
======== ========

The note payable to Investors Equity Corporation is unsecured and is owed
to an entity in which the Stockholder also owns a 50% interest. The note bears
interest at 18% (27.2%), payable monthly, as of December 31, 1997 (1996).

The note payable to HW Investments is unsecured and is used to
collateralize future borrowing through SFC for the benefit of South Financial
Floorplan, Corp., a related party. The note bears interest at 15% annually. This
note payable was repaid during 1997.

SFC leases Corporate office space from the Stockholder. Total rent expense
paid under these leases for 1997, 1996 and 1995 was $27,000, $31,500 and
$29,729, respectively. Other transactions, combined with those related to rent
expense, result in $3,750 and $186,455 due to the Stockholder at December 31,
1997 and 1996, respectively.

South Funding Corporation is owned by an officer of SFC. The above amount
due to South Funding Corporation was advanced to SFC on a short-term basis and
was repaid in 1997.

Ed Tillman Auto Sales on Cassat, Inc. (Tillman) and SFC entered into an
agreement whereby Tillman would sell SFC certain receivables with full recourse.
SFC is entitled, under the terms of the agreement, to

F-85
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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. SUBORDINATED DEBT (CONTINUED)
9.5% of the gross principal balance of the installment payments collected. In
addition, SFC may advance Tillman up to $500,000 to the extent of any
outstanding dealer reserves. This note payable was repaid during 1997.

6. CONTRACTUAL OBLIGATIONS PAYABLE TO DEALERS

Following is an analysis of contractual obligations payable to dealers for
the years ended December 31, 1995, 1996 and 1997:

RECOURSE HOLDBACK
ACCOUNTS ACCOUNTS TOTAL
----------- ----------- ------------

Balance at January 1, 1995............................. $ 2,643,498 $ 793,846 $ 3,437,344
Additions, net of payments to dealers for complying
loans............................................. 266,047 6,269,668 6,535,715
Charge-backs......................................... (495,340) (4,337,247) (4,832,587)
----------- ----------- ------------
Balance at December 31, 1995........................... 2,414,205 2,726,267 5,140,472
Additions, net of payments to dealers for complying
loans............................................. 566,930 8,377,681 8,944,611
Charge-backs......................................... (1,853,845) (8,312,033) (10,165,878)
Balance at December 31, 1996........................... 1,127,290 2,791,915 3,919,205
Additions, net of payments to dealers for complying
loans............................................. 276,952 127,289 404,241
Charge-backs......................................... (677,564) (2,194,962) (2,872,526)
Transfer to allowance for doubtful accounts.......... -- (724,242) (724,242)
----------- ----------- ------------
Balance at December 31, 1997........................... $ 726,678 $ -- $ 726,678
=========== =========== ============

7. INCOME TAXES

The following reconciliation displays the relationship between income
(loss) before income taxes and operating tax income (loss).

1997 1996 1995
----------- ----------- ---------

Income (loss) before income taxes................ $ (381,589) $ 740,769 $ 429,747
Permanent differences............................ 10,231 11,485 8,748
Temporary differences............................ (812,697) (1,430,443) (349,373)
----------- ----------- ---------
Operating tax income (loss)...................... $(1,184,055) $ (678,189) $ 89,122
=========== =========== =========

The operating tax loss may be offset against future taxable income. If not
used, the carryforward will expire in the year 2012.

The temporary differences consist primarily of losses recognized on
individual finance contracts which are permitted as deductions from taxable
income. Other differences include the deferral amounts associated with
non-refundable loan origination fees and commissions received on credit life
policies over the life of the contract in accordance with generally accepted
accounting principles.

The net deferred tax liability is comprised of the following:

1997 1996
--------- ---------

Deferred tax liability...................................... $ 959,374 $ 654,613
Deferred tax asset.......................................... (692,888) (248,867)
--------- ---------
Deferred tax liability, net....................... $ 266,486 $ 405,746
========= =========

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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES (CONTINUED)

Measurement of the provision for income taxes is based on the statutory
rate of 34% for federal taxes and approximately 5.5% for state taxes.

8. TRANSACTIONS WITH RELATED PARTIES

The following schedule displays transactions with related parties during
the years ended December 31, 1997 and 1996:

SOUTH
SOUTH FINANCIAL
SUPER STAFF, FINANCIAL FLOORPLAN,
EQUILEASE INC. SERVICES INC. TOTAL
--------- ------------ --------- ---------- -----------

Due from related parties,
December 31, 1995........... $ -- $ -- $ -- $ 414,861 $ 414,861
Advances...................... 23,292 1,817,821 28,587 30,525 1,900,225
Payments and other reductions
in amounts due.............. (23,292) (1,817,821) (28,587) (95,386) (1,965,086)
-------- ----------- -------- --------- -----------
Due from related parties,
December 31, 1996........... -- -- -- 350,000 350,000
Obligations accrued........... -- (1,852,767) -- -- (1,852,767)
Cash payments (receipts)...... -- 1,762,999 -- (350,000) 1,412,999
-------- ----------- -------- --------- -----------
Due to related parties,
December 31, 1997........... $ -- $ (89,768) $ -- $ -- $ (89,768)
======== =========== ======== ========= ===========

SFC leases certain computer equipment from Equilease, another company
wholly-owned by the Stockholder.

SFC leases all its employees, except for the Stockholder, from Super Staff,
Inc., another company wholly-owned by the Stockholder. The amount due to Super
Staff, Inc. is included in Accounts payable and accrued expenses.

Included in transactions with South Financial Services is $24,375 for rent
of SFC's branch office in Gainesville, Florida.

South Financial Floorplan, Inc. finances floorplans for automobile dealers.

F-87
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SOUTH FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. OPERATING LEASES

Certain office space is rented under operating leases. Certain leases
include options for renewal. Total rent expense for 1997, 1996 and 1995, was
$143,450, $147,131 and $118,598, respectively. Future minimum lease payments
under operating leases with an initial or remaining noncancelable term in excess
of one year at December 31, 1997 are as follows:

1998........................................................ $ 97,428
1999........................................................ 78,373
2000........................................................ 67,013
2001........................................................ 55,434
2002........................................................ 55,434
--------
Total............................................. $353,682
========

10. PRIOR PERIOD ADJUSTMENT

Retained earnings at the beginning of 1995 has been restated by $85,761.
SFC has corrected its method of computing interest income under the interest
(actuarial) method. The correction increased interest revenue for the years
prior to 1995 by $136,780, net of Federal and State taxes of $51,019.

F-88
215

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

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, OR AN OFFER TO,
OR A SOLICITATION OF ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER, OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION HEREIN CONTAINED IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE
----

Prospectus Summary.................... 3
Risk Factors.......................... 16
The Merger............................ 33
The Acquisitions...................... 33
Use of Proceeds....................... 37
Dividend Policy....................... 37
Capitalization........................ 38
Dilution.............................. 39
Selected Financial Data............... 40
Pro Forma Combined and Condensed
Financial Data...................... 42
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 50
Business.............................. 79
Management............................ 101
Principal Shareholders................ 109
Certain Transactions.................. 110
Description of Capital Stock.......... 111
Shares Eligible for Future Sale....... 116
Certain United States Federal Tax
Considerations for Non-United States
Holders............................. 117
Underwriting.......................... 120
Legal Matters......................... 122
Experts............................... 122
Additional Information................ 122
Index to Financial Statements......... F-1

---------------------
UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------

5,500,000 SHARES

(SUNBELT AUTOMOTIVE GROUP LOGO)

COMMON STOCK
------------------------

PROSPECTUS

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

RAYMOND JAMES &
ASSOCIATES, INC.
, 1998

- ------------------------------------------------------
- ------------------------------------------------------
216

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth an estimate (except for the SEC, NASD and
Nasdaq fees) of the fees and expenses, all of which will be borne by the
Registrant, in connection with the sale and distribution of the securities being
registered, other than underwriting discounts and commissions.

AMOUNT
----------

SEC Registration Fee........................................ $ 20,525
NASD Filing Fee............................................. 7,457
Legal fees and expenses..................................... 800,000
Nasdaq National Market Listing Fee.......................... 63,725
Accounting fees and expenses................................ 1,545,000
Blue Sky fees and expenses.................................. 5,000
Printing expenses........................................... 500,000
Transfer Agent Fees......................................... 5,000
Miscellaneous............................................... 53,293
----------
Total............................................. $3,000,000
==========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Articles of Incorporation of the Registrant provide that the Registrant
shall indemnify any person to the extent prescribed by the Georgia Business
Corporation Code (the "GBCC").

Section 14-2-851 of the GBCC authorizes, inter alia, a corporation to
indemnify any person ("Indemnitee") who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was an officer or director of such corporation or is or
was serving at the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided that
he acted in good faith and in a manner he reasonably believed to be in (in the
case of conduct in his official capacity) or not opposed to (in all other
instances) the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Section 14-2-851 further provides that a corporation may not
indemnify a director (1) in connection with a proceeding by or in the right of
the corporation, except for reasonable expenses incurred in connection with the
proceeding if it is determined that the director has met the relevant standard
of conduct under the GBCC; or (2) in connection with any proceeding with respect
to conduct for which he or she was adjudged liable on the basis that personal
benefit was improperly received by him or her, whether or not involving action
in his or her official capacity. In addition to the indemnifications set forth
above, Section 14-2-857 of the GBCC states that a corporation may also indemnify
and advance expenses to an officer, employee or agent of the corporation who is
a party to a proceeding because he or she is an officer, employee or agent of
the corporation to the extent as may be provided by the articles of
incorporation, the bylaws, a resolution of the board of directors, or contract
except for liability arising out of conduct that constitutes: (1) appropriation,
in violation of his or her duties, of any business opportunity of the
corporation; (2) acts or omissions which involve intentional misconduct or a
knowing violation of law; (3) liability for unlawful distribution; or (4)
receipt of an improper personal benefit. Where an officer or director is
successful on the merits or otherwise in defense of any action referred to
above, or in defense of any claim, issue or matter therein, the corporation must
indemnify him against the expenses (including attorneys' fees) which he

II-1
217

actually and reasonably incurred in connection therewith. Section 14-7-855 of
the GBCC provides that any indemnification shall be made by the corporation only
as authorized in each specific case upon a determination by the (i)
shareholders, (ii) Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding or by a
majority of the members of a committee of two or more disinterested directors
appointed by vote, or (iii) special legal counsel if a quorum of disinterested
directors so directs or, if there are fewer than two disinterested directors,
selected by the Board of Directors. Section 14-2-859 of the GBCC provides that
indemnification pursuant to its provision is not exclusive of other rights of
indemnification to which a person may be entitled under any bylaw, agreement,
vote of shareholders or disinterested directors or otherwise.

Section 14-2-858 of the GBCC also empowers the Company to purchase and
maintain insurance on behalf of any person who is or was an officer, director,
employee or agent of the Company against liability asserted against or incurred
by him in any such capacity, whether or not the Company would have the power to
indemnify such officer or director against such liability under the provisions
of Part 5 of Article 8 of the GBCC. The Company intends to purchase and maintain
a directors' and officers' liability policy for such purposes.

In accordance with Section 14-2-202 of the GBCC, the Articles of
Incorporation of the Registrant set forth a provision which eliminates the
personal liability of directors to the Registrant or its shareholders for
monetary damages for any action taken, or any failure to take any action, as a
director, provided, however, that no provision eliminates or limits the
liability of a director; (1) for any appropriation, in violation of his duties,
of any business opportunity of the corporation; (2) for acts or omissions which
involve intentional misconduct or a knowing violation of law; (3) for liability
in connection with unlawful distributions; or (4) for any transaction from which
the director received an improper personal benefit; provided that no such
provision shall eliminate or limit the liability of a director for any act or
omission occurring prior to the date when such provision becomes effective.

Reference is made to Section 8 of the Underwriting Agreement (Exhibit 1.1)
which provides for indemnification by the Underwriter of the Registrant, its
officers and directors.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The following sets forth information, as of the closing date of this
Offering, regarding all sales of unregistered securities of the Registrant
during the past three years. All such shares were issued in reliance upon an
exemption or exemptions from registration under the Securities Act by reason of
Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or
Rule 701 promulgated under Section 3(b) of the Securities Act, as transactions
by an issuer not involving a public offering or transactions pursuant to
compensatory benefit plans and contracts relating to compensation as provided
under Rule 701. In connection the transactions for which an exemption is claimed
pursuant to Section 4(2) of the Securities Act or Regulation D, the securities
were sold to a limited number of persons, such persons were provided access to
all relevant information regarding the Registrant and/or represented to the
Registrant that they were "sophisticated" investors, and such persons
represented to the Registrant that the shares were purchased for investment
purposes only and with no view toward distribution. In connection with the
issuances of securities for which an exemption is claimed pursuant to Rule 701,
the securities have been offered and issued by the Registrant to executive
officers, employees and consultants for compensating purposes pursuant to
written plans or arrangements.

- As of December 18, 1997, as part of the original organization of the
Company, the Registrant issued to each of Walter M. Boomershine, Jr.,
Charles K. Yancey and Stephen C. Whicker 2,000 shares each of common
stock of the Company in exchange for $1,000 in cash from each such
shareholder.

- In connection with the Merger, the Registrant will to issue up to an
aggregate of 3,800,160 shares of its common stock to the current
shareholders of Boomershine Automotive.

- In connection with the Collision Centers USA Acquisition, the Registrant
issued to James E. L. Peters stock options to purchase 5,000 shares of
the Registrant's common stock.

II-2
218

- The Registrant will issue the following shares of its common stock to the
following persons in connection with the Acquisitions: (i) 385,000 shares
to the shareholders of the Wade Ford Acquisition in exchange for all of
their interest in Wade Ford, Inc. and Wade Ford Buford, Inc., which sale
occurred as of November 21, 1997; (ii) 577,500 shares to the shareholders
of Day's Chevrolet in exchange for all of their interest in Day's
Chevrolet, Inc., which sale occurred as of March 3, 1998; and (iii)
40,000 shares to E. Moss Robertson, Jr. in exchange for all of his
interest in Robertson Oldsmobile-Cadillac, Inc., which sale occurred as
of March 1, 1998.

- On January 8, 1998, the Registrant issued to three of its officers,
pursuant to the Registrant's Incentive Stock Plan, options to purchase an
aggregate of 425,000 shares of the Registrant's common stock.

- On March 13, 1998, the Registrant issued warrants to purchase 50,000
shares of the Registrant's common stock to a consulting firm that has
rendered financial and accounting services to the Registrant in
connection with this Offering.

- On April 22, 1998, the Registrant issued to four of its executive
officers, pursuant to the Registrant's Incentive Stock Plan, options to
purchase an aggregate of 850,000 shares of the Registrant's common stock.

- On April 22, 1998, the Registrant issued to three of its officers,
pursuant to employment agreements with each of those officers, an
aggregate of 249,202 shares of the Registrant's common stock. Such
securities are subject to a risk of forfeiture in the event such
officers' employment with the Company is terminated.

- On the effective date of this Offering, the Registrant will issue to six
of its executive officers and employees, pursuant to the Registrant's
Incentive Stock Plan, options to purchase an aggregate of 317,000 shares
of the Registrant's common stock.

ITEM 16. EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

II-3
219

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

2.7** -- Stock Purchase Agreement among BAG Florida II, Inc. and the
shareholder of South Financial Corporation, dated December
23, 1997.
2.8** -- Stock Purchase Agreement among Boomershine Collision
Centers, Inc. and the shareholder of Southlake Collision
Centers, Inc., Southlake Collision Henry County, Inc. and
Southlake Collision Cobb Parkway, Inc., dated November 6,
1997.
2.9 -- Agreement and Plan of Merger by and between Sunbelt
Automotive Group, Inc. and Boomershine Automotive Group,
Inc., dated April 8, 1998, as amended on June 19, 1998, as
further amended on July 30, 1998.
3.1** -- Articles of Incorporation of the Company.
3.2 -- Articles of Amendment to Articles of Incorporation of the
Company.
3.3 -- Amended and Restated Bylaws of the Company.
4.1** -- Specimen common stock certificate.
5.1 -- Opinion of Schnader Harrison Segal & Lewis LLP.
10.1** -- Form of Employment Agreement between the Company and Walter
M. Boomershine, Jr.
10.2** -- Form of Employment Agreement between the Company and Charles
K. Yancey.
10.3** -- Form of Employment Agreement between the Company and Robert
W. Gundeck.
10.4** -- Form of Employment Agreement between the Company and Stephen
C. Whicker.
10.5** -- Form of Employment Agreement between the Company and Ricky
L. Brown.
10.6** -- Form of Employment Agreement between the Company and Alan K.
Arnold.
10.7** -- Form of Employment Agreement between the Company and R.
Glynn Wimberly.
10.8** -- 1997 and 1998 Incentive Stock Plan of Company.
10.9** -- Twenty-Year Net Lease Agreement by and between Winco Ltd.,
as Lessor, and Boomershine Pontiac, Inc., and Lessee, dated
as of September 16, 1978; as amended on July 13, 1984.
10.10 -- Lease Agreement by and between Winco Ltd., as Lessor, and
Boomershine Pontiac-GMC Truck, Inc. d/b/a Boomershine
Nissan, as Lessee, dated as of May 5, 1998.
10.11** -- Lease Agreement by and between Winco, L.P., as Landlord, and
Ford Leasing Development Company, as Tenant, dated August
11, 1992.
10.12** -- Dealership Sublease by and between Ford Lease Development
Company, as Sublandlord, and Boomershine Ford, Inc., as
Subtenant, dated August 11, 1992.
10.13** -- Lease Agreement by and between Winco, L.P., as Lessor, and
Boomershine North Cobb, Inc. d/b/a Boomershine Mitsubishi,
as Lessee, dated January 16, 1996.
10.14** -- Lease Agreement by and between Winco II, L.P., as Lessor,
and Thompson Automotive Group, Inc. d/b/a Boomershine Honda,
as Lessee, dated August 1, 1995.
10.15** -- Sub-Lease Agreement by and between Winco, L.P., as Lessor,
and Boomershine Ford, Inc., as Lessee, dated as of February
23, 1996.
10.16** -- Hummer Dealer Agreement by and between AM General Sales
Corporation and Boomershine Hummer, Inc., dated July 22,
1992
10.17** -- Form of Dealership Standards Addendum for Boomershine Isuzu,
Inc. by and between Boomershine Isuzu, Inc. and American
Isuzu Motors, Inc.; letter from American Isuzu Motors, Inc.
to Boomershine Isuzu, Inc., dated December 5, 1997
10.18** -- Ford Sales and Service Agreement by and between Boomershine
Ford, Inc. and Ford Motor Company, dated August 12, 1992
10.19** -- Nissan Dealer Sales and Service Agreement by and between
Nissan Division of Nissan Motors Corporation in U.S.A. and
Boomershine Pontiac-GMC Truck, Inc. d/b/a Boomershine
Nissan, dated May 22, 1989, as amended
10.20 -- Buick Motor Division Dealer Sales and Service Agreement by
and between Buick Motor Division of General Motors
Corporation and Boomershine Pontiac-Buick-GMC, Inc., dated
February 6, 1996
10.21 -- GMC Truck Division Dealer Sales and Service Agreement by and
between General Motors Corporation, GMC Truck Division and
Boomershine Pontiac-Buick-GMC, Inc., dated February 16, 1996

II-4
220

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10.22 -- Pontiac Division Dealer Sales and Service Agreement by and
between General Motors Corporation, Pontiac Division and
Boomershine Pontiac-GMC Truck, Inc., dated November 1, 1995
10.23** -- Agreement by and between Honda Automobile Division, American
Honda Motor Co., Inc. and Thompson Automotive Group, Inc.
d/b/a Boomershine Honda, dated April 9, 1996; Honda
Automobile Dealer Sales and Service Agreement
10.24** -- Mitsubishi Motor Sales of America, Inc. Dealer Sales and
Service Agreement by and between Mitsubishi Motor Sales of
America, Inc. and Boomershine North Cobb, Inc., dated
November 27, 1995
10.25** -- Chevrolet-Geo Dealer Sales and Service Agreement by and
between General Motors Corporation, Chevrolet Motor Division
and Day's Chevrolet, Inc., dated November 27, 1995
10.26** -- Kia Dealer Sales and Service Agreement by and between Kia
Motors America, Inc. and Grindstaff, Inc., dated May 14,
1996
10.27** -- Chrysler Sales and Service Agreement by and between
Grindstaff Chevrolet, Inc. and Chrysler Motor Corporation,
dated April 11, 1990
10.28** -- Plymouth Sales and Service Agreement by and between
Grindstaff Chevrolet, Inc. and Chrysler Motor Corporation,
dated April 11, 1990
10.29** -- Dodge Sales and Service Agreement by and between Grindstaff
Chevrolet, Inc. and Chrylser Motor Corporation, dated April
11, 1990
10.30** -- Jeep Sales and Service Agreement by and between Grindstaff
Chevrolet, Inc. and Chrysler Motor Corporation, dated April
11, 1990
10.31** -- Term Sales and Service Agreement by and between Grindstaff
Chevrolet, Inc. and Chrysler Motor Corporation, dated
December 12, 1988
10.32** -- Oldsmobile Division Dealer Sales and Service Agreement by
and between General Motors Corporation, Oldsmobile Division
and Robertson Oldsmobile-Cadillac, Inc., dated August 28,
1995
10.33** -- Cadillac Motor Car Division Dealer Sales and Service
Agreement by and between General Motors Corporation
(Cadillac Motor Car Division) and Robertson
Oldsmobile-Cadillac, Inc., dated August 28, 1995
10.34** -- Isuzu Dealer Sales and Service Agreement by and between
American Isuzu Motors, Inc. and Robertson Oldsmobile
Cadillac, Inc., dated April 23, 1990
10.35 -- Mazda Dealer Agreement by and between Robertson
Cadillac-Oldsmobile, Inc. and Mazda Motors of America, Inc.,
dated June 3, 1994
10.36** -- Ford Sales and Service Agreement by and between Hones, Inc.
and Ford Motor Company, dated October 14, 1993
10.37** -- Ford Sales and Service Agreement by and between Wade Ford,
Inc. and Ford Motor Company, dated November 8, 1983
10.38** -- Ford Sales and Service Agreement by and between Wade Ford
Buford, Inc. and Ford Motor Company, dated July 3, 1991
10.39** -- Pontiac Dealer Sales and Service Agreement by and between
General Motors Corporation, Pontiac and Jay
Pontiac-Buick-GMC, Inc., dated December 16, 1996
10.40** -- Buick Motor Division Sales and Service Agreement by and
between Buick Motor Division of General Motors Corporation
and Jay Pontiac-Buick-GMC, Inc., dated December 16, 1996
10.41** -- GMC Sales and Service Agreement by and between General
Motors Corporation, GMC and Jay Pontiac-Buick-GMC, Inc.,
dated December 16, 1996
10.42** -- Mitsubishi Motor Sales of America, Inc. Dealer Sales and
Service Agreement by and between Mitsubishi Motor Sales of
America, Inc. and Jay Pontiac-GMC Truck, Inc., dated October
4, 1996
10.43** -- Mazda Dealer Agreement by and between Jay Automotive Group
V, Inc. and Mazda Motor of America, Inc., dated November 28,
1995

II-5
221

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10.44** -- Toyota Dealer Agreement by and between Southeast Toyota
Distributors, Inc. and Jay Automotive Group II, Inc., dated
December 13, 1995, as extended
10.45** -- Saturn Distribution Corporation Retailer Agreement by and
between Saturn Distribution Corporation and Jay Automotive
Group IV, Inc., dated March 15, 1997
10.46** -- Ford Public Company Agreement (to become effective upon the
completion of the Offering)
10.47** -- Ford Sales and Service Agreement by and between Franklin
Ford Mercury, Inc. and Ford Motor Company (to become
effective upon the completion of the Offering)
10.48** -- Ford Sales and Service Agreement by and between Wade Ford
Buford, Inc. and Ford Motor Company (to become effective
upon the completion of the Offering)
10.49** -- Ford Sales and Service Agreement by and between Wade Ford,
Inc. and Ford Motor Company (to become effective upon the
completion of the Offering)
10.50** -- Ford Sales and Service Agreement by and between Boomershine
Ford, Inc. and Ford Motor Company (to become effective upon
the completion of the Offering)
10.51 -- Sublease between Novacare Outpatient Rehabilitation Division
East, Inc. and Boomershine Automotive Group, Inc., dated
February 5, 1998
10.52 -- Commercial Lease Agreement by and between James E. L.
Peters, Jr. and Boomershine Collision Centers, Inc., dated
April 23, 1998
10.53 -- Commercial Lease Agreement by and between James E. L.
Peters, Jr. and Southlake Collision Center, Inc., effective
as of November 1, 1994
10.54 -- Commercial Lease Agreement by and between James E. L.
Peters, Jr. and Southlake Collision Henry County, Inc.,
effective as of June 1, 1997, as amended on December 1, 1997
10.55 -- Shopping Center Lease by and between Cedar Hills Investors,
LLC and South Financial Corporation, dated March 16, 1998
10.56 -- Lease Agreement by and between WINCO II, L.P. and
Boomershine Pontiac-Buick-GMC, Inc., dated June 26, 1998
(Hummer Lease)
10.57 -- Lease by and between Alan K. Arnold, Wade Ford, Inc. and
Sunbelt Automotive Group, Inc. (Guarantor), dated June 2,
1998
10.58 -- Lease by and between Alan K. Arnold, Wade Ford Buford, Inc.
and Sunbelt Automotive Group, Inc. (Guarantor), dated June
2, 1998
10.59 -- Dealership Lease between Marshall M. Manor and Wade Ford,
Inc., dated September 1, 1983
10.60 -- Lease Agreement by and between KIMCO Autofund, LP and
Franklin Ford Mercury, Inc., dated June 15, 1998
10.61 -- Form of Lease Agreement by and between E. Moss Robertson,
Jr. and Robertson Oldsmobile-Cadillac, Inc.
10.62 -- Form of Sublease Agreement by and between Jay Leasing, Inc.
and Jay Automotive Group, Inc. (Automall Lease)
10.63 -- Form of Lease Agreement by and between Jay Leasing, Inc. and
Jay Automotive Group, Inc. (Veteran's Parkway Lease)
10.64 -- Lease Agreement between Joyce M. Maloof and Southeast Toyota
Distributors, Inc., dated October 6, 1989, as assigned
pursuant to that Assignment of Lease and Option by and
between Southeast Toyota Distributors, Inc. and Columbus
Auto Sales, Inc., dated October 6 1989; as further assigned
pursuant to that Second Assignment of Lease and Option by
and between Columbus Auto Sales, Inc. and Jay Automotive
Group II, Inc., dated July 12, 1990
10.65 -- Form of Ford Motor Company Ford Sales and Service Agreement
Standard Provisions
10.66 -- Form of Nissan Public Ownership Addendum
10.67 -- Form of American Honda Motor Co., Inc. Policy on the Public
Ownership of Honda and Acura Dealerships
10.68 -- Form of Supplemental Agreement to General Motors Corporation
Dealer Sales and Service Agreement

II-6
222

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10.69 -- Chevrolet-Geo Dealer Sales and Service Agreement, by and
between General Motors Corporation, Chevrolet Motor Division
and Grindstaff Chevrolet, Inc., dated July 7, 1987
10.70 -- Agreement of Lease by and between Kimco Autofund, L.P. and
Grindstaff, Inc., dated July 31, 1998
10.71 -- Form of Agreement between Nissan Motor Corporation in U.S.A.
and Sunbelt Automotive Group, Inc.
10.72 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Robert W. Gundeck in favor of Sunbelt Automotive Group,
Inc., dated May 1, 1998
10.73 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Stephen C. Whicker in favor of Sunbelt Automotive Group,
Inc., dated May 1, 1998
10.74 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Ricky L. Brown in favor of Sunbelt Automotive Group, Inc.,
dated May 1, 1998
10.75 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Charles K. Yancey in favor of Sunbelt Automotive Group,
Inc., dated May 1, 1998
10.76 -- Form of Commercial Lease Agreement by and between CLD
Properties, L.P. and ALD Properties, L.P., as landlords, and
BAG of Georgia IV, Inc., as tenant
10.77 -- Approval Letter from AM General Corporation (Hummer)
21.1 -- Subsidiaries
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Pyke & Pierce, CPA's.
23.3 -- Consent of Davis, Monk & Company.
23.4 -- Consent of Schnader Harrison Segal & Lewis LLP (included in
the opinion filed as Exhibit 5.1).
24.1** -- Powers of Attorney (included on the signature page to this
Registration Statement).
27.1 -- Financial Data Schedule (for SEC use only).
99.1** -- Consent of George D. Busbee.
99.2** -- Consent of Lee M. Sessions, Jr.
99.3** -- Consent of Jack R. Altherr.
99.4 -- Consent of Alan K. Arnold

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

** Previously filed.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-7
223

(4) The undersigned Registrant hereby undertakes to provide to the
Underwriter at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required
by the Underwriter to permit prompt delivery to each purchaser.

(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 14
hereof, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person thereof in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-8
224

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia, on the 10th day of August, 1998.

SUNBELT AUTOMOTIVE GROUP, INC.
a Georgia corporation

By: /s/ ROBERT W. GUNDECK
------------------------------------
Robert W. Gundeck
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates stated.

SIGNATURE TITLE DATE
--------- ----- ----

* Chairman of the Board and August 10, 1998
- ----------------------------------------------------- Senior Vice President
Walter M. Boomershine, Jr.

* Chief Operating Officer, August 10, 1998
- ----------------------------------------------------- President and Director
Charles K. Yancey

* Chief Executive Officer and August 10, 1998
- ----------------------------------------------------- Director (Principal Executive
Robert W. Gundeck Officer)

* Chief Financial Officer, Vice August 10, 1998
- ----------------------------------------------------- President of Finance and
Ricky L. Brown Treasurer (Principal
Accounting and Financial
Officer)

/s/ STEPHEN C. WHICKER Executive Vice President of August 10, 1998
- ----------------------------------------------------- Corporate Development,
Stephen C. Whicker General Counsel, Secretary
and Director

*By: /s/ STEPHEN C. WHICKER
-----------------------------------------------
Stephen C. Whicker
Attorney-in-fact

II-9
225

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

1.1** -- Form of Underwriting Agreement.
2.1 -- Stock Purchase Agreement among Boomershine Automotive Group,
Inc., Sunbelt Automotive Group, Inc., BAG Georgia III, Inc.,
Jay Automotive Group, Inc. and the shareholders of Jay
Automotive Group, Inc., dated January 5, 1998, as amended on
March 23, 1998, as assigned on March 31, 1998, as further
amended on July 31, 1998.
2.2 -- Agreement and Plan of Merger and Reorganization among
Boomershine Automotive Group, Inc., BAG Georgia I, Inc., BAG
Georgia II, Inc., Wade Ford, Inc., Wade Ford Buford, Inc.
and the shareholders of Wade Ford, Inc. and Wade Ford
Buford, Inc., dated November 21, 1997, as amended on January
19, 1998, as further amended on March 31, 1998, as further
amended on April 28, 1998, and as further amended on July
31, 1998.
2.3** -- Stock Purchase Agreement among Sunbelt Automotive Group,
Inc., Boomershine Automotive Group, Inc., Robertson
Oldsmobile-Cadillac, Inc. and the shareholders of Robertson
Oldsmobile-Cadillac, Inc., dated March 1, 1998.
2.4 -- Agreement and Plan of Merger and Reorganization among
Sunbelt Automotive Group, Inc., BAG Georgia IV, Inc., Day's
Chevrolet, Inc. and the shareholders of Day's Chevrolet,
Inc., dated March 3, 1998, as amended on July 31, 1998.
2.5** -- Stock Purchase Agreement among Sunbelt Automotive Group,
Inc., BAG Tennessee II, Inc., Grindstaff, Inc. and the
shareholders of Grindstaff, Inc., dated December 27, 1997,
as amended on February 24, 1998.
2.6** -- Asset Purchase Agreement among Boomershine Automotive Group,
Inc., BAG North Carolina I, Inc., Hones, Inc. and the
shareholders of Hones, Inc., dated December 11, 1997, as
assigned on January 8, 1998, as amended on January 31, 1998,
and as further amended on March 27, 1998.
2.7** -- Stock Purchase Agreement among BAG Florida II, Inc. and the
shareholder of South Financial Corporation, dated December
23, 1997.
2.8** -- Stock Purchase Agreement among Boomershine Collision
Centers, Inc. and the shareholder of Southlake Collision
Centers, Inc., Southlake Collision Henry County, Inc. and
Southlake Collision Cobb Parkway, Inc., dated November 6,
1997.
2.9 -- Agreement and Plan of Merger by and between Sunbelt
Automotive Group, Inc. and Boomershine Automotive Group,
Inc., dated April 8, 1998, as amended on June 19, 1998, as
further amended on July 30, 1998.
3.1** -- Articles of Incorporation of the Company.
3.2 -- Articles of Amendment to Articles of Incorporation of the
Company.
3.3 -- Amended and Restated Bylaws of the Company.
4.1** -- Specimen common stock certificate.
5.1 -- Opinion of Schnader Harrison Segal & Lewis LLP.
10.1** -- Form of Employment Agreement between the Company and Walter
M. Boomershine, Jr.
10.2** -- Form of Employment Agreement between the Company and Charles
K. Yancey.
10.3** -- Form of Employment Agreement between the Company and Robert
W. Gundeck.
10.4** -- Form of Employment Agreement between the Company and Stephen
C. Whicker.
10.5** -- Form of Employment Agreement between the Company and Ricky
L. Brown.
10.6** -- Form of Employment Agreement between the Company and Alan K.
Arnold.
10.7** -- Form of Employment Agreement between the Company and R.
Glynn Wimberly.
10.8** -- 1997 and 1998 Incentive Stock Plan of Company.
10.9** -- Twenty-Year Net Lease Agreement by and between Winco Ltd.,
as Lessor, and Boomershine Pontiac, Inc., and Lessee, dated
as of September 16, 1978; as amended on July 13, 1984.
10.10 -- Lease Agreement by and between Winco Ltd., as Lessor, and
Boomershine Pontiac-GMC Truck, Inc. d/b/a Boomershine
Nissan, as Lessee, dated as of May 5, 1998.
10.11** -- Lease Agreement by and between Winco, L.P., as Landlord, and
Ford Leasing Development Company, as Tenant, dated August
11, 1992.
10.12** -- Dealership Sublease by and between Ford Lease Development
Company, as Sublandlord, and Boomershine Ford, Inc., as
Subtenant, dated August 11, 1992.

226

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10.13** -- Lease Agreement by and between Winco, L.P., as Lessor, and
Boomershine North Cobb, Inc. d/b/a Boomershine Mitsubishi,
as Lessee, dated January 16, 1996.
10.14** -- Lease Agreement by and between Winco II, L.P., as Lessor,
and Thompson Automotive Group, Inc. d/b/a Boomershine Honda,
as Lessee, dated August 1, 1995.
10.15** -- Sub-Lease Agreement by and between Winco, L.P., as Lessor,
and Boomershine Ford, Inc., as Lessee, dated as of February
23, 1996.
10.16** -- Hummer Dealer Agreement by and between AM General Sales
Corporation and Boomershine Hummer, Inc., dated July 22,
1992
10.17** -- Form of Dealership Standards Addendum for Boomershine Isuzu,
Inc. by and between Boomershine Isuzu, Inc. and American
Isuzu Motors, Inc.; letter from American Isuzu Motors, Inc.
to Boomershine Isuzu, Inc., dated December 5, 1997
10.18** -- Ford Sales and Service Agreement by and between Boomershine
Ford, Inc. and Ford Motor Company, dated August 12, 1992
10.19** -- Nissan Dealer Sales and Service Agreement by and between
Nissan Division of Nissan Motors Corporation in U.S.A. and
Boomershine Pontiac-GMC Truck, Inc. d/b/a Boomershine
Nissan, dated May 22, 1989, as amended
10.20 -- Buick Motor Division Dealer Sales and Service Agreement by
and between Buick Motor Division of General Motors
Corporation and Boomershine Pontiac-Buick-GMC, Inc., dated
February 6, 1996
10.21 -- GMC Truck Division Dealer Sales and Service Agreement by and
between General Motors Corporation, GMC Truck Division and
Boomershine Pontiac-Buick-GMC, Inc., dated February 16, 1996
10.22 -- Pontiac Division Dealer Sales and Service Agreement by and
between General Motors Corporation, Pontiac Division and
Boomershine Pontiac-GMC Truck, Inc., dated November 1, 1995
10.23** -- Agreement by and between Honda Automobile Division, American
Honda Motor Co., Inc. and Thompson Automotive Group, Inc.
d/b/a Boomershine Honda, dated April 9, 1996; Honda
Automobile Dealer Sales and Service Agreement
10.24** -- Mitsubishi Motor Sales of America, Inc. Dealer Sales and
Service Agreement by and between Mitsubishi Motor Sales of
America, Inc. and Boomershine North Cobb, Inc., dated
November 27, 1995
10.25** -- Chevrolet-Geo Dealer Sales and Service Agreement by and
between General Motors Corporation, Chevrolet Motor Division
and Day's Chevrolet, Inc., dated November 27, 1995
10.26** -- Kia Dealer Sales and Service Agreement by and between Kia
Motors America, Inc. and Grindstaff, Inc., dated May 14,
1996
10.27** -- Chrysler Sales and Service Agreement by and between
Grindstaff Chevrolet, Inc. and Chrysler Motor Corporation,
dated April 11, 1990
10.28** -- Plymouth Sales and Service Agreement by and between
Grindstaff Chevrolet, Inc. and Chrysler Motor Corporation,
dated April 11, 1990
10.29** -- Dodge Sales and Service Agreement by and between Grindstaff
Chevrolet, Inc. and Chrylser Motor Corporation, dated April
11, 1990
10.30** -- Jeep Sales and Service Agreement by and between Grindstaff
Chevrolet, Inc. and Chrysler Motor Corporation, dated April
11, 1990
10.31** -- Term Sales and Service Agreement by and between Grindstaff
Chevrolet, Inc. and Chrysler Motor Corporation, dated
December 12, 1988
10.32** -- Oldsmobile Division Dealer Sales and Service Agreement by
and between General Motors Corporation, Oldsmobile Division
and Robertson Oldsmobile-Cadillac, Inc., dated August 28,
1995
10.33** -- Cadillac Motor Car Division Dealer Sales and Service
Agreement by and between General Motors Corporation
(Cadillac Motor Car Division) and Robertson
Oldsmobile-Cadillac, Inc., dated August 28, 1995
10.34** -- Isuzu Dealer Sales and Service Agreement by and between
American Isuzu Motors, Inc. and Robertson Oldsmobile
Cadillac, Inc., dated April 23, 1990

227

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10.35 -- Mazda Dealer Agreement by and between Robertson
Cadillac-Oldsmobile, Inc. and Mazda Motors of America, Inc.,
dated June 3, 1994
10.36** -- Ford Sales and Service Agreement by and between Hones, Inc.
and Ford Motor Company, dated October 14, 1993
10.37** -- Ford Sales and Service Agreement by and between Wade Ford,
Inc. and Ford Motor Company, dated November 8, 1983
10.38** -- Ford Sales and Service Agreement by and between Wade Ford
Buford, Inc. and Ford Motor Company, dated July 3, 1991
10.39** -- Pontiac Dealer Sales and Service Agreement by and between
General Motors Corporation, Pontiac and Jay
Pontiac-Buick-GMC, Inc., dated December 16, 1996
10.40** -- Buick Motor Division Sales and Service Agreement by and
between Buick Motor Division of General Motors Corporation
and Jay Pontiac-Buick-GMC, Inc., dated December 16, 1996
10.41** -- GMC Sales and Service Agreement by and between General
Motors Corporation, GMC and Jay Pontiac-Buick-GMC, Inc.,
dated December 16, 1996
10.42** -- Mitsubishi Motor Sales of America, Inc. Dealer Sales and
Service Agreement by and between Mitsubishi Motor Sales of
America, Inc. and Jay Pontiac-GMC Truck, Inc., dated October
4, 1996
10.43** -- Mazda Dealer Agreement by and between Jay Automotive Group
V, Inc. and Mazda Motor of America, Inc., dated November 28,
1995
10.44** -- Toyota Dealer Agreement by and between Southeast Toyota
Distributors, Inc. and Jay Automotive Group II, Inc., dated
December 13, 1995, as extended
10.45** -- Saturn Distribution Corporation Retailer Agreement by and
between Saturn Distribution Corporation and Jay Automotive
Group IV, Inc., dated March 15, 1997
10.46** -- Ford Public Company Agreement (to become effective upon the
completion of the Offering)
10.47** -- Ford Sales and Service Agreement by and between Franklin
Ford Mercury, Inc. and Ford Motor Company (to become
effective upon the completion of the Offering)
10.48** -- Ford Sales and Service Agreement by and between Wade Ford
Buford, Inc. and Ford Motor Company (to become effective
upon the completion of the Offering)
10.49** -- Ford Sales and Service Agreement by and between Wade Ford,
Inc. and Ford Motor Company (to become effective upon the
completion of the Offering)
10.50** -- Ford Sales and Service Agreement by and between Boomershine
Ford, Inc. and Ford Motor Company (to become effective upon
the completion of the Offering)
10.51 -- Sublease between Novacare Outpatient Rehabilitation Division
East, Inc. and Boomershine Automotive Group, Inc., dated
February 5, 1998
10.52 -- Commercial Lease Agreement by and between James E. L.
Peters, Jr. and Boomershine Collision Centers, Inc., dated
April 23, 1998
10.53 -- Commercial Lease Agreement by and between James E. L.
Peters, Jr. and Southlake Collision Center, Inc., effective
as of November 1, 1994
10.54 -- Commercial Lease Agreement by and between James E. L.
Peters, Jr. and Southlake Collision Henry County, Inc.,
effective as of June 1, 1997, as amended on December 1, 1997
10.55 -- Shopping Center Lease by and between Cedar Hills Investors,
LLC and South Financial Corporation, dated March 16, 1998
10.56 -- Lease Agreement by and between WINCO II, L.P. and
Boomershine Pontiac-Buick-GMC, Inc., dated June 26, 1998
(Hummer Lease)
10.57 -- Lease by and between Alan K. Arnold, Wade Ford, Inc. and
Sunbelt Automotive Group, Inc. (Guarantor), dated June 2,
1998
10.58 -- Lease by and between Alan K. Arnold, Wade Ford Buford, Inc.
and Sunbelt Automotive Group, Inc. (Guarantor), dated June
2, 1998
10.59 -- Dealership Lease between Marshall M. Manor and Wade Ford,
Inc., dated September 1, 1983
10.60 -- Lease Agreement by and between KIMCO Autofund, LP and
Franklin Ford Mercury, Inc., dated June 15, 1998
10.61 -- Form of Lease Agreement by and between E. Moss Robertson,
Jr. and Robertson Oldsmobile-Cadillac, Inc.

228

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10.62 -- Form of Sublease Agreement by and between Jay Leasing, Inc.
and Jay Automotive Group, Inc. (Automall Lease)
10.63 -- Form of Lease Agreement by and between Jay Leasing, Inc. and
Jay Automotive Group, Inc. (Veteran's Parkway Lease)
10.64 -- Lease Agreement between Joyce M. Maloof and Southeast Toyota
Distributors, Inc., dated October 6, 1989, as assigned
pursuant to that Assignment of Lease and Option by and
between Southeast Toyota Distributors, Inc. and Columbus
Auto Sales, Inc., dated October 6 1989; as further assigned
pursuant to that Second Assignment of Lease and Option by
and between Columbus Auto Sales, Inc. and Jay Automotive
Group II, Inc., dated July 12, 1990
10.65 -- Form of Ford Motor Company Ford Sales and Service Agreement
Standard Provisions
10.66 -- Form of Nissan Public Ownership Addendum
10.67 -- Form of American Honda Motor Co., Inc. Policy on the Public
Ownership of Honda and Acura Dealerships
10.68 -- Form of Supplemental Agreement to General Motors Corporation
Dealer Sales and Service Agreement
10.69 -- Chevrolet-Geo Dealer Sales and Service Agreement, by and
between General Motors Corporation, Chevrolet Motor Division
and Grindstaff Chevrolet, Inc., dated July 7, 1987
10.70 -- Agreement of Lease by and between Kimco Autofund, L.P. and
Grindstaff, Inc., dated July 31, 1998
10.71 -- Form of Agreement between Nissan Motor Corporation in U.S.A.
and Sunbelt Automotive Group, Inc.
10.72 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Robert W. Gundeck in favor of Sunbelt Automotive Group,
Inc., dated May 1, 1998
10.73 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Stephen C. Whicker in favor of Sunbelt Automotive Group,
Inc., dated May 1, 1998
10.74 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Ricky L. Brown in favor of Sunbelt Automotive Group, Inc.,
dated May 1, 1998
10.75 -- Nonrecourse Promissory Note and Stock Pledge Agreement by
Charles K. Yancey in favor of Sunbelt Automotive Group,
Inc., dated May 1, 1998
10.76 -- Form of Commercial Lease Agreement by and between CLD
Properties, L.P. and ALD Properties, L.P., as landlords, and
BAG of Georgia IV, Inc., as tenant
10.77 -- Approval Letter from AM General Corporation (Hummer)
21.1 -- Subsidiaries
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Pyke & Pierce, CPA's.
23.3 -- Consent of Davis, Monk & Company.
23.4 -- Consent of Schnader Harrison Segal & Lewis LLP (included in
the opinion filed as Exhibit 5.1).
24.1** -- Powers of Attorney (included on the signature page to this
Registration Statement).
27.1 -- Financial Data Schedule (for SEC use only).
99.1** -- Consent of George D. Busbee.
99.2** -- Consent of Lee M. Sessions, Jr.
99.3** -- Consent of Jack R. Altherr.
99.4 -- Consent of Alan K. Arnold

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

** Previously filed.