Fidelity Holdings, Inc.
                             80-02 Kew Gardens Road
                              Kew Gardens, NY 11415
                                 (718) 520-6500
                               Fax (718) 793-4841


                                        September 18, 1997

To:   The Shareholders of Lichtenberg Robbins Buick, Inc.
      d/b/a Lichtenberg Buick,
      and Lichtenberg Motors Inc. d/b/a Lichtenberg Mazda,
      listed on the signature pages hereof:

      Re:   Proposal by FIDELITY HOLDINGS, INC. or one of its wholly-owned
            subsidiaries ("FDHG") to purchase all of the issued and
            outstanding voting capital stock of Lichtenberg Buick and
                      Lichtenberg Mazda (collectively, the "Dealer")

Gentlemen:

      1. This letter (the "Letter of Intent" or "LOI") shall serve to confirm
our proposed transaction (the "Transaction" regarding the purchase by Fidelity
Holdings, Inc., or one of its wholly-owned subsidiaries and the sale by all
shareholders of the Dealer (the "Sellers") of all of his, its or their shares of
Common Stock of Dealer (herein referred to as the "Common Stock" or the
"Shares"). The purchase price for all of the shares of Common Stock of Dealer
shall be equal to 8X pro forma after tax earnings of Dealer for the 12 months
ended December 31, 1997 (determined as if the Dealer was a tax paying "C"
corporation for federal and state tax purposes) determined by applying generally
accepted accounting principles ("GAAP") as certified by Dealer's independent
accountants, subject to adjustments for normalization of salaries and
perquisites, rents and other extraordinary expenses of operations of the Dealer,
and adjustments for any reserves for chargebacks, and used car reserves, payable
seventy-five (75) percent in the stock of FDHG and twenty-five (25) percent in
cash at the Closing, subject to appropriate reserves for post-closing purchase
price adjustments. In the event that, pursuant to the above formula, the
purchase price is less than $1.8 million, either FDHG or the Sellers shall have
the right to terminate the Transaction. In no event will the cash portion of the
purchase price be less than $500,000. The purchase price shall be allocated
between Lichtenberg Buick and Lichtenberg Mazda as agreed by the parties prior
to Closing.

      2. The market value of the FDHG Common Stock delivered to the Stockholders
would be based upon the average of the closing sale prices of FDHG Common Stock
on NASDAQ, as reported in the Wall Street Journal, during the twenty (20)
trading days ending five (5) full trading days prior to the closing of the
Transaction (the "Closing"). This purchase price assumes that the Net Working
Capital (as hereinafter defined) of Dealer as of the Closing is not less than an
amount mutually agreed upon by FDHG and the Sellers (which amount shall be set
forth in the Agreement, as hereinafter defined), and that there is no material
decrease in the current fiscal year in revenues or operating earnings as
compared to the prior year. For purposes of this Letter of Intent, "Net Working
Capital" shall mean the net working capital of Dealer (i.e., total current
assets less total current liabilities), further reduced by any long-term debt of
Dealer. The purchase price may be adjusted downward in the event that any of
such assumptions proves incorrect.

<PAGE>

      3. Seventy-five (75) percent of the purchase price, consisting of
two-thirds of the Shares and all of the cash, shall be payable at Closing with
the remainder of the Shares to be held in escrow by counsel for Sellers pending
determination of the purchase price, inclusive of any post-closing adjustments,
as contemplated under paragraph 2 hereof. Once such determination has been
completed, (a) the Sellers shall be obligated to repay 25% of any downward
adjustment in the purchase price in cash, (b) stock representing 5% of the
purchase price shall remain in escrow, (c) the balance of the purchase price, as
adjusted, shall be released from escrow and paid to the Sellers, and (d) any
remaining Shares shall be returned to FDHG. The remaining escrowed Shares shall
continue in escrow until the first anniversary of the Closing as a reserve
against any undisclosed liabilities of the Dealer.

      4. The Sellers acknowledge that the Shares issued will not be registered
with the SEC for resale and that they will be acquiring the Shares for
investment purposes and not with any present intent to sell, pledge or otherwise
dispose of the Shares. As such, the Shares will be subject to restrictions on
their transfer and, in all likelihood, will not be saleable for at least one (1)
year from the date of Closing. The Company will attempt to make available to the
Sellers piggy back registration rights for the Shares, subject to the approval
of the underwriter in any underwritten offering of the Company's common stock.

      5. As is customary in transactions of this kind, consummation of the
proposed purchase is subject to the satisfactory completion of a due diligence
investigation and will be conditioned upon several factors, including but not
limited to the following:

            A. Preparation and execution of a definitive stock purchase
agreement (the "Agreement") and other closing documents, which Agreement and
other closing documents shall contain the terms and provisions expressed herein,
together with such further terms and conditions as are customary in a
transaction as contemplated. In the Agreement, the Stockholder will make certain
representations, warranties and covenants as to the title to the assets of the
Companies, collectability of receivables, inventories (new and used), charge
backs, warranty claims, absence of undisclosed litigation, claims against or
liabilities of the Companies, existence of insurance coverage, correctness of
the financial statements, absence of any material adverse change in the
Companies' business or financial condition since December 31, 1996, and as of
the date of Closing, and any other representations, warranties and covenants as
are customary in a transaction as contemplated. These representations,
warranties and covenants will survive the Closing for a period of two years,
except with respect to (i) specifically identified items and (ii) additional
income tax liabilities, which will survive the Closing as mutually agreed or
through the term of the statutes for the applicable income tax filings,
respectively.

            B. The acquisition by FDHG of the Shares must represent one hundred
percent (100%) of the issued and outstanding Common Stock of Dealer at the
Closing, free and clear of any and all liens, claims or encumbrances of any
nature whatsoever.

            C. The cancellation at or prior to the Closing, of any stock options
of Dealer outstanding, at no cost to FDHG.

<PAGE>

            D. Letters of resignation from all of Dealer's directors, effective
as of the Closing.

            E. Certain key employees (mutually agreed upon by FDHG and Sellers),
shall have agreed to remain in the employ of the Dealer. Peter Lichtenberg's
employment agreement will be for a term of five (5) years from the date of
Closing with base compensation of $150,000 per annum plus profit participation
incentives. The scope and duration of the restrictive covenants contained in
Peter Lichtenberg's agreement shall be dependent upon whether or not the Company
offers him continued employment on at least comparable terms at the expiration
of his employment agreement. If he is offered such employment but elects not to
accept it, he shall be prohibited from directly or indirectly participating in
the sale of new or used cars within the five Boroughs of New York City for a
period of three years following the termination of his employment and shall be
prohibited from servicing or soliciting any customers of Dealer or hiring any
employee of Dealer for a period of three years following termination of his
employment. If the company does not offer Peter Lichtenberg continued employment
on the basis contemplated above, the scope of the foregoing restriction on
competition shall be reduced to the Boroughs of Queens and Brooklyn.

            F. All liens and security interests securing debts of Dealer which
have been paid in full prior to or at the Closing shall have been fully released
to the reasonable satisfaction of FDHG and all Uniform Commercial Code financing
statements covering such debts shall have been terminated.

            G. All obligations of Dealer which are not being retired or
satisfied by the Sellers prior to or at the Closing will be modified in such a
manner that their covenants, repayment schedules, and other provisions will be
upon terms reasonably satisfactory to FDHG. If the Sellers are personal
guarantors of any of such obligations and the Company is not successful in
eliminating such guarantees, the Company will indemnify the Sellers against any
damages they suffer arising out of or related to such guarantees.

            H. FDHG shall have received from counsel for Dealer and the Sellers
an opinion in scope and substance reasonably satisfactory to FDHG and its
counsel dated as of the date of Closing.

            I. FDHG shall be satisfied in its sole discretion with the results
of its continuing legal, financial and business due diligence investigations of
Dealer.

            J. No unsatisfied liens for the failure to pay taxes of any nature
whatsoever shall exist against Dealer, or against or in any way affecting any of
the Shares.

            K. All officers and directors of Dealer and each of the
Sellers shall have repaid in full all debts or other obligations, if any, owed
to Dealer at or prior to the Closing. Obligations of Dealer, if any, owed to
Sellers will be assumed by FDHG or renegotiated at closing.

            L. No material adverse change, as determined in FDHG's sole
discretion, shall have occurred in Dealer's business or its future business
prospects.

<PAGE>

            M. No customer or customers representing a significant
amount in the aggregate of Dealer's business shall have materially curtailed or
terminated its or their relationship with Dealer.

            N. FDHG shall have received from Dealer audited balance
sheets, income statements and statements of cash flows for the years ended
December 31, 1995 and December 31, 1996, unless FDHG's independent auditors
determine that, for SEC filing purposes, audited statements of Dealer are
required, in which event the historical financial statements of the Dealer must,
in the opinion of FDHG's independent public accountants, be suitable or readily
adaptable for incorporation in the registration statements, prospectuses and
annual reports to be filed by FDHG with the Securities and Exchange Commission
("SEC") under applicable federal securities laws and regulations.

            O. Jeffrey Lichtenberg shall have covenanted that he will
not, for a period of two (2) years from the date of Closing (i) compete within
the five Boroughs of New York City, (ii) service or solicit any customers of
Dealer, or (iii) recruit any employee of Dealer.

            P. Since December 31, 1996, Dealer shall have made no
dividend, consulting or other payment to the Sellers except for salaries (not to
exceed current compensation) approximately $72,000 in one-time bonuses and
distributions to cover their personal federal and state income obligations
arising due to the Sub-Chapter "S" status of Dealer.

            Q. Dealer shall be required to deliver to FDHG the financial and
other information listed on Exhibit "A" hereto on an monthly basis from the date
of execution of this Letter of Intent until the date of Closing.

            R. Sellers shall have assumed and/or discharged all deferred taxes
of Dealer.

            S. Sellers shall take all necessary actions, including
joining in the required election, so that FDHG may obtain a stepped-up basis in
all of the assets of Dealer (i.e., a successful Section 338(h)(10) election, no
cash-to-accrual liability to FDHG or Dealer shall be created upon the sale of
the stock, and all deferred taxes on the books of Dealer shall have been
eliminated). The Company shall reimburse (as additional purchase price) the
Sellers in cash on any after-tax basis for any additional taxes payable by the
Sellers in connection with this Transaction as a result of such Section
338(h)(10) election.

            T. The Transaction shall have received all necessary approval of
shareholders and directors of FDHG (or the purchasing entity, if not FDHG) and
the Sellers.

<PAGE>

            U. FDHG shall have successfully completed its contemplated public
offering of securities and, in connection therewith, shall have received net
proceeds therefrom of a minimum of $6.9 million.

            V. Appropriate arrangements for all premises contemplated to be
utilized by Dealer in its operations following the Closing shall have been
entered into on terms satisfactory to FDHG and sellers.

      6. Immediately upon your acceptance of this Letter of Intent, our counsel
shall be instructed to prepare the Agreement, and Sellers shall cause Dealer to
provide to FDHG and its designated representatives complete access at the
offices of Dealer's accountants to all the books, records and documents
(financial and otherwise) of Dealer, and to further cause the directors,
officers and employees of Dealer to cooperate with and assist FDHG and its
representatives in conducting their examination of Dealer. In connection
therewith, FDHG agrees not to contact any lender, customer, or other person
associated in business with Dealer without first obtaining the consent of
Dealer. Sellers will permit representatives of FDHG to have access at reasonable
times, and in a manner so as not to interfere with the normal business
operations of Dealer, to the headquarters office of Dealer.

      7. During FDHG's on-site investigation of Dealer, FDHG shall not discuss
any aspects of the operation of Dealer with any employee of Dealer, and FDHG
shall direct all requests for information and material only through Mr. Peter
Lichtenberg or his designated representatives, unless otherwise agreed to by
FDHG and the Dealer. Furthermore, and in addition to the provisions above,
Dealer shall arrange with FDHG a mutually agreeable time and place at which FDHG
may conduct interviews in a format and covering subjects reasonably acceptable
to Dealer with key customers and employees of Dealer mutually agreed to by FDHG
and the Sellers.

      8. The Agreement shall specify a closing date, which may be extended to
March 30, 1998 by FDHG or to a later day by the mutual written consent of all
the parties, contingent, of course, upon any required approvals of
manufacturers, governmental authorities or agencies, and all other contingencies
provided herein. We would like the Agreement to be executed no later than
October 31, 1997, and the final closing and consummation of the transactions
contemplated herein and therein to occur on or before January 31, 1998.

      9. Effective upon execution of this Letter of Intent, the Sellers will
cause Dealer to:

            A. carry on its business in substantially the same manner as
heretofore and not introduce any material new method of management, operation or
accounting;

            B. maintain its properties, facilities and equipment and other
assets in as good working order and condition as at present, ordinary wear and
tear excepted;

            C. perform all its material obligations under debt and lease
instruments and other agreements relating to or affecting its assets,
properties, equipment and rights;

<PAGE>

            D. subject to paragraph 5.V. hereof, maintain present debt and lease
instruments and not enter into new or amended debt or lease instruments other
than in the ordinary course of business, without the knowledge and consent of
United;

            E. keep in full force and effect present insurance policies or other
comparable insurance coverage;

            F. use its best efforts to maintain and preserve its business
organization intact, retain its present employees and maintain its relationship
with suppliers, customers and others having business relations with the Dealer;

            G. not effect any change in the capital structure of the
organizations, including, but not limited to, the issuance of any option,
warrant, call, conversion right or commitment of any kind with respect to the
Dealer's capital stock or the purchase or other reacquisition of any outstanding
shares for treasury stock;

            H. not materially increase present salaries and commission levels
for all officers, directors, employees and agents;

            I. prohibit expenditures outside the normal course of business, and
prohibit capital expenditures in excess of $10,000 per expenditure or $50,000 in
the aggregate without the prior approval of FDHG;

            J. maintain compliance with all permits, laws, rules and
regulations, consent order, etc.;

            K. maintain its present agreements with manufacturers and perform
according to the terms of such agreements; and

            L. not, without the knowledge and consent of FDHG, declare any
dividends nor pay out extraordinary bonuses, fees, commissions or any other
unusual distributions to any Seller, directors, management or other personnel
between the date of the Letter of Intent and the Closing.

      10. Each party shall bear its own fees and expenses, including any
investment banking fees. Each party represents and warrants to the others that
they have not utilized the services of any broker in connection with the
transactions contemplated by this Agreement and that such parties shall not be
liable for any fees or expenses due or payable to any broker by reason of any
such transactions.

<PAGE>

      11. In consideration of the substantial expenditures of time, effort and
money to be undertaken by FDHG in connection with the preparation and execution
of the Agreement and the various reviews, investigations and verifications
referred to above, Sellers and Dealer shall hereby undertake and agree (i) that
during the term of this Letter of Intent, Sellers and Dealer, neither
individually or collectively, shall enter into or conduct any discussions with
any other person for the purchase of any of the Shares or any of Dealer's assets
(except for acquisition or disposition of assets in the ordinary course of
business as permitted hereby, and (ii) individually and collectively, to
negotiate in good faith in an attempt to successfully conclude the Transaction.
In addition, pending execution and delivery of the Agreement (or the earlier
termination of this Letter of Intent), Dealer will not and will not permit its
representatives to solicit or encourage (including by way of furnishing any
non-public information concerning Dealer's business, properties or assets) any
acquisition proposal and will terminate all negotiations relating to an
acquisition proposal that may exist as of the date of this Letter of Intent. In
the event an acquisition proposal is received, Dealer shall promptly notify
FDHG. As used in this Letter of Intent, "acquisition proposal" means any
proposal for a merger or other business combination involving Dealer or for the
acquisition of an equity interest in, or a substantial portion of the assets of,
Dealer other than pursuant to the Transaction.

      12. Dealer and Sellers each agree that he, she or it will not make any
public disclosure of this Letter of Intent or the execution of the Agreement
without FDHG's prior approval. Prior to issuing any press release or public
statement concerning the Transaction, a copy shall be made available to the
other parties for their comments. If the proposed Transaction is not consummated
for any reason whatsoever, the respective parties hereto shall keep confidential
any information (unless ascertainable from public or published information or
trade sources) concerning the business or operations of the parties hereto.

      13. FDHG will hold and will cause its employees, representatives,
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process, or by other requirements of law,
all documents and information concerning Dealer to FDHG in connection with the
Transaction (except to the extent that such information can be shown to have
been (a) previously known by FDHG and where the disclosure of which is not in
violation of an obligation of FDHG, (b) in the public domain through no fault of
FDHG, or (c) later lawfully acquired by FDHG from other sources unless FDHG knew
such information was obtained in violation of an agreement of confidentiality)
and will not release or disclose such information to any other person, except
its auditors, attorneys, financial advisors and other consultants and advisors
in connection with the Agreement (it being understood that such persons shall be
informed by FDHG of the confidential nature of such information and shall be
directed by FDHG to treat such information confidentially).

      14. It is acknowledged that, between the date hereof and the execution and
delivery of the Agreement, the Transaction is subject, as to structure only, to
the parties' reasonable satisfaction with respect to the corporate and tax
consequences thereof, including but not limited to the issues contemplated in
Paragraph 5.S hereof. While it is not the parties' intention to renegotiate the
financial terms of the Transaction, as described in this Memorandum of
Agreement, the parties merely wish to reserve their right to be reasonably
satisfied that the structure of the Transaction will effectuate the intentions
of the parties hereto without material adverse consequences to them from a
corporate or legal point of view. In connection therewith, at the election of
FDHG, the parties will use their best efforts to restructure the Transaction as
a purchase of assets rather than stock.

<PAGE>

      15. It is, of course, understood that the respective rights and
obligations of Sellers and FDHG remain to be defined in the Agreement into which
this Letter of Intent and all prior discussions shall merge; provided however,
that the respective obligations of the Sellers and FDHG described in paragraphs
7, 8 and 10-14 hereof shall be binding upon each, respectively, when this Letter
of Intent is executed and delivered to FDHG.

      If the foregoing meets with your approval, you should each execute and
return a copy of this Letter of Intent, whereupon this letter shall constitute a
Letter of Intent between FDHG and the Sellers in accordance with the terms and
conditions set forth herein. This letter of Intent may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. A facsimile signature by
any Party on a counterpart of this Letter of Intent shall be binding and
effective for all purposes. Such party shall, however, subsequently deliver to
the other party an original executed copy of this Letter of Intent. Whether or
not the Transaction is consummated, each Party shall pay their own expenses in
connection therewith. Unless otherwise agreed to in writing by the FDHG, each of
the Sellers and Dealer, this Letter of Intent will terminate in accordance with
its own terms if the Agreement is not executed on or before October 31, 1997.

      THIS OFFER MADE BY FDHG IN THIS LETTER OF INTENT SHALL REMAIN OPEN UNTIL
5:00 P.M. SEPTEMBER 19, 1997, AT WHICH TIME IF EXECUTED SIGNATURE PAGES OF THIS
LETTER OF INTENT HAVE NOT BEEN DELIVERED BY PERSONS REPRESENTING ONE HUNDRED
PERCENT (100%) OF THE ISSUED AND OUTSTANDING COMMON STOCK, ALL OFFERS AND
AGREEMENTS MADE BY FDHG HEREIN SHALL BECOME IMMEDIATELY NULL AND VOID UNLESS AN
AGREEMENT TO THE CONTRARY IS EVIDENCED IN WRITING BY FDHG.


                            Very truly yours,

                            FIDELITY HOLDINGS, INC.


                            By: /s/ Doron Cohen
                               ------------------------
                            Name: Doron Cohen
                            Title: President


ACCEPTED AND AGREED THIS ____ DAY OF SEPTEMBER 1997.

LICHTENBERG BUICK

By: /s/ Peter Lichtenberg

      Name: Peter Lichtenberg
      Title: President

LICHTENBERG MAZDA

By: /s/ Peter Lichtenberg

      Name: Peter Lichtenberg
      Title:President

/s/ Peter Lichtenberg

PETER LICHTENBERG, Seller

/s/ Jeffrey Lichtenberg

JEFFREY LICHTENBERG, Seller