<PAGE>

                                                                   EXHIBIT 2.1.1
 
                     AGREEMENT AND PLAN OF REORGANIZATION


     THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into this 1st
day of July, 1997 by and among FIRSTAMERICA AUTOMOTIVE, INC., a Delaware
corporation ("FirstAmerica"), California Carriage, Ltd. dba Concord Honda, a
California corporation ("Company"), and Donald V. Strough, Trustee of the
Strough 1983 Revocable Trust (the "Shareholder").

                               R E C I T A L S:

     A.  The Company is an authorized Honda dealership franchisee located at
1300 Concord Boulevard, Concord, California.

     B.  The parties hereto desire to provide for the acquisition by
FirstAmerica of substantially all of the property of the Company.

     C.  The parties desire to complete such acquisition as a tax deferred
reorganization within the meaning of Sections 368(a)(1)(C) and 368(a)(2)(G)(i)
of the Internal Revenue Code of 1986, as from time to time amended (the "Code").

     Now, therefore,  the parties hereto agree as follows:

     1.  Asset Acquisition.
         ----------------- 

          1.1.  Acquired Assets. The assets which are the subject of this
                --------------- 
agreement (the "Acquired Assets") shall consist of substantially all of the
properties and assets owned by the Company, including, without limitation, all
of the assets and properties of the Company used in connection with or derived
from the Honda dealership franchise owned by the Company, which assets and
properties shall include, without limitation, all Honda special tools,
furniture, fixtures, equipment, tools, leasehold improvements, both new and used
motor vehicles, parts and accessories, tires, work in progress, oil, grease,
supplies, advertising literature, forms, customer files and databases, parts
return privileges, rights under new car purchase orders and deposits related
thereto, goodwill, the telephone number of the Company, the name "Concord Honda"
and all derivatives thereof, accounts and notes receivable, permits, licenses,
patents, trademarks, tradenames, all leases and rights of occupancy of the
premises at which the Company conducts the dealership, leasehold improvements,
the Honda franchise, and all contracts, agreements and commitments arising in
connection with the operation of the dealership. The assets of the Company shall
be set forth on Schedule 1.1 to be attached hereto prior to the Closing. A
physical inventory of motor vehicles and parts shall be taken by representatives
of both the Company and FirstAmerica immediately prior to the Closing, and shall
be initialed on behalf of both the Company and FirstAmerica and attached hereto
as part of Schedule 1.1.

          1.2.  Acquisition. The Company hereby agrees to convey, transfer,
                -----------  
assign and deliver to FirstAmerica, and FirstAmerica hereby agrees to acquire,
on the Closing Date, all of the Acquired Assets in accordance with and subject
to all of the terms and conditions of this Agreement.

          1.3.  Company Debt. Set forth on Schedules 3.6 and 3.7 attached hereto
                ------------         
is a list of all the debts, obligations and liabilities of the Company (the
"Company Debt"). The term "Company Debt" shall not include any obligation owed
by the Company to Malindon, Ltd., a California corporation, and FirstAmerica
shall not assume or otherwise become responsible for the payment of any portion
of such obligation.

          1.4.  Consideration.  As full consideration for the Acquired Assets,
                -------------                                                 
FirstAmerica shall 
<PAGE>
 
acquire the Acquired Assets subject to the Company debt and shall further
deliver to the Company 1,330,000 shares of common stock of FirstAmerica. Such
shares shall, upon delivery to the Company, be fully paid and non-assessable.
FirstAmerica shall deliver to the Company at the Closing one or more
certificates evidencing such number of shares of FirstAmerica common stock. Upon
receipt of such shares, the Company shall immediately distribute such shares,
together with all other assets of the Company, to the Shareholder in exchange
for all of the outstanding capital stock of the Company held by such
Shareholder. Such distribution shall constitute a material part of the plan of
reorganization provided for in this Agreement and Plan of Reorganization.

          1.5.  Tax Intent. Notwithstanding any of the provisions of this
                ----------
Agreement to the contrary, it is the intent of all of the parties hereto that
the transaction provided for herein qualify as a tax deferred reorganization
within the meaning of sections of 368(a)(1)(C) and 368(a)(2)(G)(i) of the Code.
It is further intended that the distribution of capital stock of FirstAmerica by
the Company to its Shareholder in exchange for the Company's outstanding shares,
shall constitute an exchange within Section 354(a)(1) of the Code. All of the
provisions of this Agreement shall be interpreted in a manner which is
consistent with the intent expressed in the immediately preceding sentence.
Further, each of the parties hereto shall undertake all actions as may be
necessary or appropriate to qualify the transactions provided for herein as a
tax deferred reorganization within the meaning of the sections of the Code
referenced immediately above. Each of the parties to this Agreement hereby
adopts this Agreement as a plan of reorganization, and agrees to report the
transaction provided for herein, for all tax reporting purposes, in a manner
which is consistent with the intent set forth in this section.

          1.6.  Transfer Restrictions; Legends. The shares of FirstAmerica 's
                ------------------------------
Common Stock to be issued pursuant to Section 1.4 shall not have been registered
and shall be characterized as "Restricted Securities" under the federal
securities laws, and under such laws such shares may be resold without
registration under the Securities Act of 1933, as amended, only in certain
limited circumstances. Each certificate evidencing shares of FirstAmerica's
Common Stock to be issued pursuant to Section 1.4 shall bear the following
legend:

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
          ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
          SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
          ABSENCE OF SUCH REGISTRATION UNLESS AN EXEMPTION FROM
          THE REQUIREMENT OF REGISTRATION IS AVAILABLE AS
          DEMONSTRATED BY AN OPINION OF LEGAL COUNSEL REASONABLY
          ACCEPTABLE TO THE COMPANY.

          1.7.  Transfer Taxes.  FirstAmerica shall pay any and all sales,
                --------------                                            
transfer or other similar taxes which may be imposed or payable on or in
connection with the transfer of the Acquired Assets.

     2.   Lease.  Concurrently with the Closing, the Company shall enter into an
          -----                                                                 
amendment and restatement of the lease for that certain real property commonly
known as 1300 Concord Boulevard, Concord, California, at which the Company
operates its business immediately prior to the Closing, which lease shall be in
the form attached hereto as Schedule 2 and incorporated herein by this
reference.

     3.   Representations and Warranties of Company and Shareholder.  The
          ---------------------------------------------------------      
Company and Shareholder hereby jointly and severally represent and warrant to
FirstAmerica as follows:

          3.1. Organization.  The Company is a corporation duly organized,
               ------------                                               
validly existing and 

                                       2
<PAGE>
 
in good standing under the laws of its state of incorporation, and is duly
authorized, qualified, and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to carry on its business in the
places and in the manner as now conducted, except (i) as set forth in Schedule
3.1 attached hereto; or (ii) where the failure to do so does not have a material
adverse effect on the business, operations, properties, assets, or condition of
the Company, taken as a whole.

          3.2.  Authorization.  The Shareholder and the Company have the full
                -------------                                                
legal right, power and authority to enter into this Agreement.  The execution
and delivery of this Agreement, and each other document, agreement and
instrument contemplated hereby and the consummation of the transactions provided
for in this Agreement have been duly authorized by the Company by all necessary
corporate action.  This Agreement and each other agreement, document or
instrument, contemplated hereby has been duly executed and delivered by the
Shareholder and the Company.  No approvals or consents of any person or entity
are necessary  in connection with the power and authority of the Shareholder and
the Company to perform their respective obligations pursuant to this Agreement.
This Agreement constitutes the legal, valid and binding obligation of the
Shareholder and the Company enforceable against the Shareholder and the Company
in accordance with its terms, subject only to laws relating to bankruptcy,
insolvency or other similar provisions affecting creditors' rights.

          3.3.  Articles of Incorporation, By-Laws and Minute Books.  True,
                ---------------------------------------------------        
complete and correct copies of the Articles of Incorporation and By-Laws of the
Company, each as amended to date, have been furnished to FirstAmerica.  The
stock records and minute books of the Company, all of which have been made
available to FirstAmerica, contain true and complete minutes and records of all
meetings, proceedings and other actions of the stockholders and directors of the
Company from the date of organization.

          3.4.  Authorized Capitalization.  The authorized capital stock of the
                -------------------------                                      
Company consists solely of that number and classes or series of shares as is set
forth on Schedule 3.4 attached hereto.  The number of issued and outstanding
shares of each class or series of stock of the Company are set forth on Schedule
3.4 attached.  All the issued and outstanding shares of the Company are owned as
set forth on Schedule 3.4, and are validly issued and outstanding, fully paid
and non-assessable, free and clear of all liens, security interests, pledges,
charges, voting trusts, equities, restrictions, encumbrances and claims of every
kind. All of the outstanding shares of the Company were offered, issued, sold
and delivered by the Company in compliance with all applicable state and federal
laws concerning the issuance of securities. None of the shares of the Company
which are outstanding were issued in violation of any preemptive rights held by
any past or present shareholder of the Company. The Company does not have any
outstanding options, warrants, rights or other securities, plans, contracts or
agreements which give the holder thereof or any other person the right to
purchase any shares of the Company's capital stock or which are convertible into
or exercisable for any shares of such capital stock or under which any such
option, warrant, or right or security may be issued in the future. The Company
does not have any obligation, whether contingent or otherwise, to purchase,
redeem, or otherwise acquire any of its equity securities or interests therein
or pay a dividend or make any distribution with respect thereto.

          3.5.  Subsidiaries.  Except as set forth on Schedule 3.5 attached
                ------------                                               
hereto, the Company does not own, whether of record or beneficially or control,
directly or indirectly, any capital stock, securities convertible into capital
stock, or any other equity interest in any corporation, association, or business
entity, and is not a party either directly or indirectly to any joint venture,
partnership, limited liability company, or any other entity.

          3.6.  Financial Statements. Attached hereto as Schedule 3.6 are copies
                --------------------  
of the financial statements of the Company, including statements of income, cash
flow, and retained earnings for each of the most recent three fiscal years of
the Company and for the period ending sixty (60) days prior to the date of this
Agreement.  Also attached as a part of Schedule 3.6 is a copy of the most recent
dealer financial 

                                       3
<PAGE>
 
statement for the Company which dealer financial statement will be updated as of
the Closing. Such financial statements, including the dealer financial
statement, have been and will be prepared in accordance with generally accepted
accounting principles applied on a consistent basis and present fairly the
financial position of the Company as of the dates and for the periods indicated.
At the Closing Date, the Company shall have a net worth of not less than
$1,996,000.

          3.7.   Liabilities.  Attached hereto as Schedule 3.7, is an accurate
                 -----------                                                  
list, as of the Closing, of all material liabilities and obligations of the
Company which are not reflected on the most recent dealer financial statement as
of the date of this Agreement.  Schedule 3.7 shall be updated as of the Closing
to reflect all such material liabilities and obligations of the Company not
reflected on the dealer financial statement prepared concurrently with the
Closing.  Such Schedule includes any and all liabilities and obligations,
whether accrued, absolute, secured or unsecured, contingent or otherwise.
Company has previously provided to FirstAmerica Company's reasonable estimate of
the maximum amount of potential exposure for any debt or liability which is not
fixed or is contested.

          3.8.   Receivables.  Set forth on Schedule 3.8 attached hereto is an
                 -----------                                                  
accurate list as of the date of this Agreement of the accounts and notes
receivable of the Company, including receivables from and advances to employees
and shareholders.  Such Schedule includes an aging of all accounts and notes
receivable.  Such Schedule shall be updated as of the Closing.

          3.9.   Permits and Intangibles. Attached hereto as Schedule 3.9, is an
                 -----------------------  
accurate list and summary description of all permits, licenses, franchises,
certificates, trademarks, tradenames, service marks, patents, and other similar
items owned by the Company.  All such items are valid and in full force and
effect. There is no default, or the occurrence of any event, which with the
passage of time, the giving of notice or both will constitute a default, of any
such items. None of such items infringe upon the rights of any other person.

          3.10.  Assets.  Attached hereto as Schedule 3.10 is an accurate list,
                 ------                                                        
as of the date of this Agreement, of all personal property (other than
inventory) having a cost in excess of $10,000, owned or leased by the Company,
together with true, complete and correct copies of any and all leases for any
property leased by the Company.  Except as otherwise set forth on Schedule 3.10,
all of such property is in good working order and condition, ordinary wear and
tear excepted.  The leases referenced in Schedule 3.10 have been duly
authorized, executed and delivered, and constitute the legal, binding and valid
obligations of the Company, and, to the knowledge of the Shareholders, no other
party to any such leases is in default of any provision thereof, and such leases
constitute the legal, valid and binding obligations of the other parties
thereto.  All of the assets used by the Company in the operation of the business
are either owned by the Company or leased by the Company.  Schedule 3.10 shall
be updated as of the Closing.

          3.11.  Material Contracts.  Set forth on Schedule 3.11 attached
                 ------------------                                      
hereto, is an accurate and complete list, as of the date of this Agreement, of
all material contracts, commitments and similar agreements to which the Company
is a party, or by which any of its assets or properties are bound.  The Company
has delivered true and accurate copies of each such contract to FirstAmerica.
Except as otherwise set forth on Schedule 3.11, the Company has complied with
all material commitments and obligations pertaining to it, and is not in
material default, and has received no notice of default with respect to, and no
event has occurred which, with the passage of time, the giving of notice or both
would constitute a material default with respect to, any contracts set forth on
Schedule 3.11.

          3.12.  Unions.  Except as set forth on Schedule 3.12 attached hereto,
                 ------                                                        
the Company is not a party to any arrangement with any union, and no employees
of the Company are represented by any labor union or covered by any collective
bargaining agreement, nor, to the knowledge of the Company, is any effort to
establish such representation in progress.  There is no pending or, to the
knowledge of the 

                                       4
<PAGE>
 
Company, threatened labor dispute involving the Company or any of its employees.

          3.13.  Insurance.  Set forth on Schedule 3.13 attached hereto, is an
                 ---------                                                    
accurate list as of the date of this Agreement, of all insurance policies of the
Company, including an accurate list of all insurance losses, including workers'
compensation claims, of the Company for the past three policy years.

          3.14.  Employee Plans.  Set forth on Schedule 3.14 attached hereto is
                 --------------                                                
a complete and accurate list of all employee benefit plans including without
limitation, all pension, profit sharing, deferred compensation, bonus, and
multi-employer plans and other plans currently maintained or sponsored by the
Company, or to which the Company contributes or has an obligation to contribute
in the future.  The Company and, to the knowledge of the Shareholder, each of
the plans referenced on Schedule 3.14 attached is in substantial compliance with
all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").  No plan has incurred an accumulated funding
deficiency, as defined for purposes of the Internal Revenue Code and ERISA, and
the Company does not have any direct or indirect obligation or liability to the
Pension Benefit Guaranty Corporation or to the Internal Revenue Service for any
excise tax or penalty. Neither the Company nor any ERISA Affiliate (i.e., each
business which is treated together with the Company as a single employer under
Section 4001(a)(14) of ERISA or Internal Revenue Code Section 414(b), (c), (m),
(n) or (o)) has incurred or expects to incur any withdrawal liability to any
multi-employer plan. Copies of all of the plans listed on Schedule 3.14,
together with current determination letters and the filings with the Internal
Revenue Service for the last two fiscal years of the plans, are attached to
Schedule 3.14.

          3.15.  Litigation:  Conformity with the Law.  Except as set forth on
                 ------------------------------------                         
Schedule 3.15 attached hereto, there are no claims, actions, suits or
proceedings, pending or, to the knowledge of the Shareholder, threatened,
against or affecting the Company or any of its properties at law or in equity,
or before or by any federal, state, municipal, or any other governmental
department, commission, board, bureau, agency, or instrumentality, having
jurisdiction with respect to the Company, and no notice of any claim, action,
suit, or proceeding, whether pending or threatened has been received.  The
Company has conducted its business in substantial compliance with all federal,
state and local statutes, ordinances, permits, licenses, orders, variances,
rules and regulations.  Except as set forth on Schedule 3.15, the Company is not
subject to any order of any Court, or federal, state, municipal, governmental
department, commission, board, bureau, agency, or instrumentality.

          3.16.  Taxes.  The Company has filed and will file all requisite
                 -----                                                    
federal, state, local and all other tax returns for all fiscal periods ended on
or before the Closing Date, except for any such tax returns not yet due.  There
are no examinations in progress, or claims against the Company for federal or
other taxes, including penalties or interest, for any period or periods prior to
the Closing, except as otherwise set forth on Schedule 3.16 attached hereto.
Amounts reflected on the financial statements of the Company as of the Closing
as reserves for taxes not yet payable are sufficient for the payment of all
taxes, including penalties and interest, for all periods prior to the Closing.

          3.17.  Environmental Matters.  None of the Company's assets has ever
                 ---------------------                                        
been used by the Company or, to the best of the Company's knowledge, by previous
owners or operators, in the disposal of, or to produce, store, handle, treat,
release, or transport, any hazardous waste or hazardous substance other than in
accordance with applicable law; none of the Company's assets has ever been
designated or identified in any manner pursuant to any environmental protection
statute as a hazardous waste or hazardous substance disposal site, or a
candidate for closure pursuant to any environmental protection statute; no lien
arising under any environmental protection statute has attached to any revenues
or to any of the Company's property; the Company does not have any contingent
liability in connection with the release of any hazardous substances into the
environment, including third-party releases onto property that the Company owns
or operates; and the Company has not received a summons, citation, notice, or
directive from the 

                                       5
<PAGE>
 
Environmental Protection Agency or any other federal or state governmental
agency concerning any action or omission by the Company relating to the release
or disposal of hazardous waste or hazardous substances. Except as set forth on
Schedule 3.17 attached hereto, the Company has not at any time owned or leased
any real estate having underground storage tanks.

          3.18.  Shareholder Qualification.  The Shareholder is an "accredited
                 -------------------------                                    
investor" for purposes of the Securities Act of 1933, as amended, and the
regulations promulgated thereunder. In addition, the Shareholder, by reason of
such Shareholder's business or financial experience or the business or financial
experience of such Shareholder's professional advisors who are not affiliated
with or compensated by FirstAmerica or FirstAmerica's affiliates, has the
capacity to protect such Shareholder's interests in connection with the
transactions contemplated hereunder.

          3.19.  Representations and Warranties on Closing Date.  The
                 ----------------------------------------------      
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date.

     4.   Representations and Warranties of FirstAmerica.  FirstAmerica
          ----------------------------------------------               
represents and warrants as follows:

          4.1.   Organization.  FirstAmerica is a corporation duly organized,
                 ------------                                                
validly existing and in good standing under the laws of its state of
incorporation and is duly authorized, qualified and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
carry on its business in the places and in the manner as now conducted except in
states where the failure to be so authorized, qualified or licensed would not
have a material adverse effect on its business.

          4.2.   FirstAmerica Stock.  The shares of common stock of FirstAmerica
                 ------------------                                             
to be delivered to the Company at the Closing hereunder, when delivered in
accordance with the terms of this Agreement, will constitute valid and legally
issued shares of FirstAmerica's capital stock, fully paid and nonassessable,
and, with the exception of restrictions upon resale, will be legally equivalent
in all respects to the majority of the capital stock of FirstAmerica issued and
outstanding as of the Closing Date.

          4.3.   Authorization.   The representatives of FirstAmerica executing
                 -------------                                                 
this Agreement have the corporate authority to enter into and bind FirstAmerica
by the terms of this Agreement.  FirstAmerica has the full legal right, power
and authority to enter into this Agreement.  The execution and delivery of this
Agreement and each other agreement, document or instrument contemplated hereby,
and the consummation of the transaction provided for in this Agreement have been
duly authorized by all necessary corporate action on behalf of FirstAmerica.
This Agreement, and each other Agreement, document or instrument contemplated
hereby, has been duly executed and delivered by FirstAmerica.  No approvals or
consents of any person or entity are necessary in connection with the power and
authority of FirstAmerica to perform its obligations pursuant to this Agreement.
This Agreement constitutes the legal, valid and binding obligation of
FirstAmerica enforceable against FirstAmerica in accordance with its terms,
subject only to laws relating to bankruptcy, insolvency or other similar
provisions affecting creditors' rights.

          4.4.   Representations and Warranties on Closing Date.  The
                 ----------------------------------------------      
representations and warranties of FirstAmerica contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date.

     5.   Conditions to FirstAmerica's Obligations to Close.  The obligations of
          -------------------------------------------------                     
FirstAmerica under this Agreement are, at the option of FirstAmerica, subject to
the conditions set forth below.  FirstAmerica 

                                       6
<PAGE>
 
shall have the right to waive in writing all or part of any one or more of the
following conditions without, however, releasing the Company or the Shareholder
from any liability for any loss or damage sustained by FirstAmerica by reason of
the breach by the Company or Shareholder of any covenant, obligation or
agreement contained herein, or by reason of any misrepresentation made by the
Company and upon such waiver may proceed with the transactions contemplated by
this Agreement.

          5.1. Agreements and Conditions.  On or before the Closing Date,
               -------------------------                                 
Company shall have complied with and duly performed in all material respects all
agreements and conditions on its part to be complied with and performed pursuant
to or in connection with this Agreement on or before the Closing Date.

          5.2. Representations and Warranties.  The representations and
               ------------------------------                          
warranties of the Company contained in this Agreement, or otherwise made in
writing in connection with the transactions contemplated hereby, shall be true
and correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date.

          5.3. No Legal Proceedings.  No action or proceeding shall have been
               --------------------                                          
instituted or threatened to restrain or prohibit the transaction provided herein
and the Company or which might result in any material adverse change in the
business, prospects or financial or other condition of the assets of the
Company.

          5.4. Consents.  FAA Concord H, Inc. and America Honda Corporation
               --------                                                    
("Franchisor") shall have entered into a customary dealer sales and service
agreement designating FAA Concord H, Inc. as the duly authorized dealer for the
sales and service of the Franchisor's vehicles at the location or locations at
which the Company operates its dealership immediately prior to the Closing, free
of any material condition which in the opinion of FirstAmerica would be adverse
to FAA Concord H, Inc.  All permits and licenses necessary to enable FAA Concord
H, Inc. to conduct the dealership and service facilities at the location of the
Company's dealership immediately prior to the Closing shall have been obtained.
All other requisite consents and approvals shall have been obtained.

          5.5. No Material Adverse Change.  No material adverse change in the
               --------------------------                                    
results of operations or financial conditions of the Company shall have
occurred, and the Company shall not have suffered any material loss or damage to
its properties or assets, whether or not covered by insurance.

          5.6. Lease.  The Lease in form attached hereto as Schedule 2 shall
               -----                                                        
have been executed by all of the parties thereto and delivered to the Company.

          5.7. Floor Plan Financing.  FAA Concord H, Inc. shall have obtained
               --------------------                                          
appropriate floor plan financing, as reasonably acceptable to FirstAmerica as
necessary for the operation of the automobile franchise which is operated by the
Company immediately prior to the Closing.

          5.8. Bill of Sale.  The Company shall have executed, acknowledged and
               ------------                                                    
delivered to FirstAmerica the Bill of Sale conveying all the Acquired Assets to
FirstAmerica, which Bill of Sale shall be in the form of Schedule 5.8 attached
hereto.

          5.9. Assignment of Option.  The Company shall have executed and
               --------------------                                      
delivered to FirstAmerica the Assignment of Option Agreement conveying to
FirstAmerica that certain Option Agreement entered into between California
Carriage, Ltd., a California corporation, and Concord Nissan, Inc., a California
corporation, dated September 12, 1995, which Assignment of Option shall be in
the form of Schedule 5.9 attached hereto.

                                       7
<PAGE>
 
          5.10.  Bulk Sale.  The Company shall furnish, in a timely manner, all
                 ---------                                                     
affidavits and lists of creditors and such other instruments or documents as may
be required to comply with all applicable sales laws.

     6.   Conditions to Company's and Shareholder's Obligation to Close. The
          -------------------------------------------------------------     
obligation of the Company and the Shareholder under this Agreement is, at the
option of the Company and the Shareholder subject to the conditions set forth
below. The Company and the Shareholder shall have the right to waive in writing
all or part of any one or more of the following conditions without, however,
releasing FirstAmerica from any liability for any loss or damage sustained by
the Company by reason of the breach by FirstAmerica of any covenant, obligation
or agreement contained herein, or by reason of any misrepresentation made by
FirstAmerica and upon such waiver may proceed with the transactions contemplated
by this Agreement.

          6.1. Agreements and Conditions.  On or before the Closing Date,
               -------------------------                                 
FirstAmerica shall have complied with and duly performed in all material
respects all of the agreements and conditions on its part required to be
complied with or performed pursuant to this Agreement on or before the Closing
Date.

          6.2. Representations and Warranties of FirstAmerica.  The
               ----------------------------------------------      
representations and warranties of FirstAmerica contained in this Agreement, or
otherwise made in writing in connection with the transactions contemplated
hereby, shall be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date.

          6.3. No Legal Proceedings.  No action or proceeding shall have been
               --------------------                                          
instituted or threatened to restrain or prohibit the transaction provided for
herein.

          6.4. Consents.  FAA Concord H, Inc. and Franchisor shall have entered
               --------                                                        
into a customary dealer sales and service Agreement designating FAA Concord H,
Inc. as the duly authorized dealer for the sales and service of the Franchisor's
automobiles at the location or locations at which the Company operates its
dealership immediately prior to the Closing, free of any material condition
which is adverse to FAA Concord H, Inc.  All permits and licenses necessary to
enable FAA Concord H, Inc. to conduct the automobile dealership and service
facilities at the location at the Company's dealership immediately prior to the
Closing shall have been obtained.  All other requisite consents and approvals
shall have been obtained.

     7.   Deliveries by Company.  The Company shall, upon the Closing, deliver
          ---------------------                                               
to FirstAmerica the following:

          7.1.  A Bill of Sale in the form attached hereto as Schedule 5.9, duly
executed and acknowledged by the Company;

          7.2.  Copy of resolutions adopted by the Board of Directors of the
Company and by the Shareholder authorizing the execution and delivery by the
Company of this Agreement, the adoption of this Agreement as a plan of
reorganization and the consummation by the Company of the transactions
contemplated herein;

          7.3.  Certificate of Secretary for the Company certifying that the
resolutions referenced immediately above have been duly adopted by both the
Board of Directors of the Company and the shareholders of the Company; and

                                       8
<PAGE>
 
          7.4.  Certificate of Incumbency for the President of the Company;

          7.5.  The Company shall deliver to FirstAmerica the Assignment of
Option Agreement in the form attached hereto as Schedule 5.10, duly executed by
the Company, which delivery shall occur on or about July 1, 1997,
notwithstanding that the Closing hereunder shall occur subsequent thereto.  The
parties hereto acknowledge that the Closing hereunder shall not occur until the
Company is able to convey to FirstAmerica all of the Acquired Assets without
resulting in a default under certain existing agreements between the Company and
General Motors Corporation, and that the earliest date for such permissible
Closing is anticipated to be on or about September 4, 1997.  Notwithstanding
such delay in the Closing, the parties hereto desire that FirstAmerica be in a
position, prior to such date, to exercise the Option Agreement to be transferred
to FirstAmerica pursuant to the Assignment of Option Agreement.  Accordingly,
the Assignment of Option Agreement shall be executed and delivered as of the
date set forth above, and the balance of the Acquired Assets shall be conveyed
upon the Closing as otherwise provided herein.  The delivery of the Assignment
of Option Agreement and the delivery of the balance of the Acquired Assets shall
constitute a single integrated transaction.

     8.   Deliveries by FirstAmerica.  FirstAmerica shall, upon Closing, deliver
          -----------------------------                                         
to the Company the following:

          8.1. Stock certificate or certificates representing the shares of
FirstAmerica Stock issuable to the Company hereunder;

          8.2. The lease for the premises to be occupied by FAA Concord H, Inc.,
in the form attached hereto as Schedule 2, duly executed by the landlord thereof
and FAA Concord H, Inc.;

          8.3. Copy of resolutions adopted by the Board of Directors of
FirstAmerica authorizing the execution and delivery of this Agreement, the
adoption of this Agreement as a plan of reorganization, and the consummation of
the transaction contemplated herein;

          8.4. Certificate of Secretary certifying that the resolutions
referenced immediately above have been duly adopted by the Board of Directors of
FirstAmerica; and

          8.5. Certificate of Incumbency for the President of FirstAmerica.

     9.   Escrow.  The parties hereto, upon execution of this Agreement, shall
          ------                                                              
open an escrow with a mutually agreeable escrow company ("Escrow Holder").  The
parties shall properly provide to the Escrow Holder any and all documentation
necessary for Escrow Holder to publish such notice as may be required by the
bulk transfer laws of the State of California. Any costs of such escrow shall be
paid by Subsidiary.

     10.  Closing.  The consummation of the transactions provided for in this
          -------                                                            
Agreement ("Closing") shall occur at the offices of Kay & Merkle, 100 The
Embarcadero, Penthouse, San Francisco, California 94105 or at such other
location as the parties may agree in writing, on __________, 1997 at 10:00 a.m.,
or at such other date and time (the "Closing Date") as the parties hereto may
mutually agree in writing.

     11.  Additional Covenants.
          -------------------- 

          11.1.  Access.  Commencing on the date of this Agreement and
                 ------                                               
continuing through the Closing Date, the Company shall allow the officers and
authorized representatives of FirstAmerica reasonable access during normal
business hours to the business locations, properties and books and records of
the Company, and shall further provide to FirstAmerica all such additional
information as FirstAmerica may request with respect to the Company.

                                       9
<PAGE>
 
          11.2.  Conduct of Business.  Commencing on the date hereof and
                 -------------------                                    
continuing through the Closing Date, the Company shall continue to manage,
operate and maintain all of its business and activities in substantially the
same manner as prior to the date hereof, and shall not introduce any new or
novel method of management, operation or accounting.  Further, the Company shall
maintain its respective properties and facilities in as good a working condition
as exist as of the date hereof, ordinary wear and tear and loss by casualty
excepted.  The Company shall use its best efforts to maintain and preserve its
business organization intact and to retain its present working relationship with
employees, suppliers and customers.

          11.3.  Accounting Method.  FirstAmerica acknowledges that the Company
                 -----------------                                             
currently uses the last-in first-out method of inventory accounting.  The
Company shall continue to utilize the same method of accounting as currently
utilized by the Company, including the last-in first-out method of inventory
accounting.

          11.4.  Operations.  Commencing upon delivery of the Assignment of
                 ----------                                                
Option Agreement as set forth in Section 7.5 hereof, and continuing thereafter
through the Closing, FirstAmerica shall be entitled to direct the management of
the Company, and shall receive the benefit and incur the cost of all profit and
loss generated by the Company, and in connection therewith, during such period
Donald Strough shall not receive any compensation or other payments from the
Company provided, however, that nothing herein shall prohibit the Company from
paying any and all obligations owed by the Company.

     12.  Notices.  All notices, requests or demands to a party hereunder shall
          -------                                                              
be in writing and shall be given or served upon the other party by personal
service, by certified return receipt requested or registered mail, postage
prepaid, or by Federal Express or other nationally recognized commercial
courier, charges prepaid, addressed as set forth below.  Any such notice,
demand, request or other communication shall be deemed to have been received
upon the earlier of personal delivery thereof, three (3) business days after
having been mailed as provided above, or one (1) business day after delivery
through a commercial courier, as the case may be.  Notices may be given by
facsimile and shall be effective upon the transmission of such facsimile notice
provided that the facsimile notice is transmitted on a business day and a copy
of the facsimile notice together with evidence of its successful transmission
indicating the date and time of transmission is sent on the day of transmission
by recognized overnight carrier for delivery on the immediately succeeding
business day. Each party shall be entitled to modify its address by notice given
in accordance with this Section.

               To FirstAmerica:  100 The Embarcadero, Penthouse
                                 San Francisco, CA 94105
                                 Attn:  W. Bruce Bercovich
                                 Fax No.: (415) 512-9277

               With Copy To:     Kay & Merkle
                                 100 The Embarcadero, Penthouse
                                 San Francisco, CA 94105
                                 Attn: W. Bruce Bercovich
                                 Fax No.: (415) 512-9277

               To Company:       1300 Concord Avenue
                                 Concord, California
                                 Attn: Donald V. Strough
                                 Fax No.: (510) 689-8924

               To Shareholder:   Donald V. Strough

                                       10
<PAGE>
 
                                 1300 Concord Avenue
                                 Concord, California
                                 Fax No.: (510) 689-8924


     13.  Indemnification.
          --------------- 

          13.1.  Indemnification by Shareholder.  The Shareholder agrees to
                 ------------------------------                            
indemnify, defend and hold harmless FirstAmerica and its directors, officers,
employees, agents, affiliates, successors, assigns, representatives and
attorneys from and against any and all claims, actions, proceedings, demands,
assessments, damages, costs, liabilities and obligations of any nature
whatsoever including, without limitation, reasonable attorneys' fees arising out
of or relating to: (i) any breach of any representation or warranty made by the
Shareholder herein or on any Schedule or any other document attached hereto or
delivered in connection herewith; (ii) any nonfulfillment with any agreement or
covenant required to be performed by the Shareholder pursuant to this Agreement;
or (iii) any liability under the Securities Act of 1933, as amended, the
Securities Act of 1934, as amended, or any other federal or state law or
regulation arising out of any untrue statement of a material fact relating to
the Company or the Shareholder, and which is provided by the Company or the
Shareholder.

          13.2.  Indemnification by FirstAmerica.   FirstAmerica hereby agrees
                 -------------------------------                              
to indemnify, defend, and hold harmless the Shareholder and its trustees,
beneficiaries, employees, agents, affiliates,  successors, assigns,
representatives and attorneys, from and against any and all claims, actions,
proceedings, demands, assessments, damages, costs, liabilities and obligations
of any nature whatsoever, including without limitation, reasonable attorneys'
fees arising out of or relating to (i) any breach of any representation or
warranty made by FirstAmerica herein, or on any Schedule or any other document
attached hereto or delivered in connection herewith; (ii) any nonfulfillment of
any agreement or covenant required to be performed by FirstAmerica pursuant to
this agreement; or (iii) any liability under the Securities Act of 1933 as
amended, the Securities Act of 1934, as amended, or any other federal or state
law or regulation arising out of any untrue statement of a material fact
relating to FirstAmerica and which is provided by FirstAmerica.

          13.3.  Claim.   For purposes of this section, the following terms
                 -----                                                     
shall have the definitions as set forth below:

               13.3.1.  "Indemnified Party" shall be defined as the party
entitled to indemnification under the provisions of Section 13.1 or 13.2;

               13.3.2.  "Indemnifying Party" shall be defined as the party
obligated to provide indemnification pursuant to the provisions of Section 13.1
or 13.2;

               13.3.3.  "Third Person" shall be defined as any person asserting
a claim against any party to this Agreement, which claim is subject to an
indemnification obligation set forth in this Section 13.3;

     In the event that an Indemnified Party shall receive notice, or otherwise
have knowledge of any claim, or the commencement of any action or proceeding by
a Third Person, the Indemnified Party shall promptly give written notice thereof
to the Indemnifying Party.  The provision of such written notice shall be a
condition precedent to the obligation of Indemnifying Party to provide any
indemnification under the provisions of this Section 13.3.  The Indemnifying
Party shall have the right to defend, negotiate and settle any claim by a Third
Person hereunder at the expense and with counsel selected by the Indemnifying
Party which is reasonably acceptable to Indemnified Party, as long as it
diligently pursues such settlement, 

                                       11
<PAGE>
 
negotiation or defense in good faith. The Indemnified Party shall have the right
to participate with counsel of its choice and at its expense, in any settlement,
negotiation or defense, provided, however that the Indemnifying Party's counsel
shall at all times be lead counsel and shall determine all defense and
settlement strategies, actions, and the like. The Indemnified Party shall
cooperate on a reasonable basis with the Indemnifying Party and shall provide to
the Indemnifying Party all books, records and other information reasonably
requested by the Indemnifying Party.

     14.  Termination.   If the Closing Date shall not have occurred on or prior
          -----------                                                           
to April 30, 1997 as such date may be from time to time extended upon the mutual
consent of the parties, any party that is not in default in the performance of
its obligations under this Agreement may, thereafter terminate this Agreement by
giving written notice to the other parties hereto.

     15.  Miscellaneous.
          ------------- 

          15.1.  Amendment.  This Agreement shall not be changed, modified or
                 ---------                                                   
amended except by a writing signed by the party to be charged.

          15.2.  Governing Law.   This Agreement and its validity, construction
                 -------------                                                 
and performance shall be governed in all respects by the laws of the State of
California without giving effect to principles of conflict of laws.

          15.3.  Severability.   If any provision of this Agreement or the
                 ------------                                             
application of any provision hereof to any person or circumstance is held
invalid, the remainder of this Agreement and the application of such provision
to other persons or circumstances shall not be affected unless the provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.

          15.4.  Benefit of Parties.   This Agreement shall be binding upon and
                 ------------------                                            
inure to the benefit of the parties hereto and their respective successors,
heirs, legal representatives and assigns.

          15.5.  Time.  Time is of the essence with respect to this Agreement.
                 ----                                                         

          15.6.  Headings.   The headings in the paragraphs of this Agreement
                 --------                                                    
are inserted for convenience of reference only and shall not constitute a part
hereof.

          15.7.  Counterparts.  This Agreement may be executed simultaneously in
                 ------------                                                   
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          15.8.  Further Assurances.  Each of the parties hereto agrees to
                 ------------------                                       
perform such other acts, and to execute, acknowledge and deliver, prior to, at
or subsequent to Closing, such other instruments, documents and other materials
as any other may reasonably request and as shall be necessary in order to effect
the consummation of the transactions contemplated hereby.

          15.9.  Schedules.  The parties acknowledge and agree that the
                 ---------                                             
schedules provided for herein shall be attached to the Agreement effective as of
the Closing Date and shall be a part of and incorporated into the Agreement as
though fully set forth in this Agreement.

                                       12
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.

FIRSTAMERICA:                                  COMPANY:

FirstAmerica Automotive, Inc.                  California Carriage, Ltd.,
a Delaware corporation                         a California corporation



By: /s/ Thomas A. Price                            /s/ Donald V. Strough
    ____________________________                   ____________________________
    Thomas A. Price, President                     Donald V. Strough, President


                                               SHAREHOLDER:

                                               Strough 1983 Revocable Trust



                                               By: /s/ Donald V. Strough
                                                  ____________________________
                                                   Donald V. Strough, Trustee

                                       13
<PAGE>
 
                               LIST OF SCHEDULES



               Schedule 1.1                  Acquired Assets
               Schedule 2                    Lease
               Schedule 3.1                  Organization
               Schedule 3.4                  Authorized Capitalization
               Schedule 3.5                  Subsidiaries           
               Schedule 3.6                  Financial Statements   
               Schedule 3.7                  Liabilities            
               Schedule 3.8                  Receivables            
               Schedule 3.9                  Permits and Intangibles 
               Schedule 3.10                 Assets                         
               Schedule 3.11                 Material Contracts             
               Schedule 3.12                 Unions                         
               Schedule 3.13                 Insurance                      
               Schedule 3.14                 Employee Plans                 
               Schedule 3.15                 Litigation                     
               Schedule 3.16                 Taxes                          
               Schedule 3.17                 Environmental Matters          
               Schedule 5.8                  Bill of Sale                  
               Schedule 5.9                  Assignment of Option Agreement