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                                                                    EXHIBIT 10.3

                     TAX INDEMNITY AND ALLOCATION AGREEMENT


         TAX INDEMNITY AND ALLOCATION AGREEMENT ("AGREEMENT") dated as of
December 15, 1999, by and among Pacific USA Holdings Corp., a Texas corporation
("PACIFIC USA"), Pacific Realty Group, Inc., a Nevada corporation
("STOCKHOLDER"), Newmark Homes Corp., a Nevada corporation ("COMPANY") and
Technical Olympic USA, Inc., a Delaware corporation ("PARENT").

                                    RECITALS

         A. Pacific USA owns all of the issued and outstanding stock of the
Stockholder; Stockholder owns stock of the Company representing 80% or more of
the issued and outstanding Shares ("STOCKHOLDER SHARES") of the Company; and the
Company owns various Subsidiaries ("COMPANY SUBSIDIARIES") included in the
Affiliated Group filing a consolidated Federal income tax return with the
Stockholders and the Company.

         B. Under a Stock Purchase Agreement (including the exhibits, schedules
and Company Disclosure Letter attached thereto or referenced therein) dated as
of November 24, 1999 by and among the parties to this Agreement ("ACQUISITION
AGREEMENT"), 9,200,000 of the Stockholder Shares ("PURCHASED SHARES") will be
acquired by the Parent ("ACQUISITION").

         C. The execution and delivery of this Agreement by the parties hereto
is a condition to the obligation of the parties to the Agreement to consummate
the Acquisition.

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

                                    ARTICLE I

                                   DEFINITIONS

         Capitalized terms used and not otherwise defined in this Agreement
shall have the meanings assigned to such terms in the Acquisition Agreement. As
used in this Agreement, the following terms shall have the following respective
meanings:

                  "ACQUISITION" is defined in Recital C. above.

                  "ACQUISITION AGREEMENT" is defined in Recital C. above.

                  "AFFILIATED GROUP" means any affiliated group within the
meaning of Code 1504(a).

                  "AFTER-TAX BASIS" shall mean the amount sufficient to hold the
recipient and any member of its Affiliated Group harmless from (i) all Taxes
payable or deemed payable with respect to such payment and (ii) any other Taxes
actually required to be paid with respect to the receipt or accrual of such
payment, in each case after taking into account any deductions



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to which the recipient and any member of its Affiliated Group is entitled as a
result of the payment of such Taxes.

                  "AGREEMENT" is defined in the introductory paragraph of this
Agreement.

                  "CLAIMANT" is defined in Section 4.4(a) below.

                  "CODE" means the Internal Revenue Code of 1986, as amended (or
any successor thereto).

                  "COMPANIES" means the Company and each Company Subsidiary.

                  "COMPANY" is defined in the introductory paragraph to this
Agreement.

                  "COMPANY SUBSIDIARIES" is defined in Recital A. above and a
"COMPANY SUBSIDIARY" means one of the Company Subsidiaries.

                  "FINAL DETERMINATION" with respect to an Indemnity Amount
shall mean (a) a final decision with respect to the proposed adjustment by an
IRS appeals officer, as evidenced by the issuance of a 90-day letter, IRS Form
870-AD or like notice, unless judicial proceedings are initiated, (b) a final
non-appealable decision with respect to the proposed adjustment by a court of
competent jurisdiction, or (c) the settlement of the proposed adjustment with
the consent of the Indemnifying Party and the Claimant.

                  "INDEMNIFYING PARTY" is defined in Section 4.4(a) below.

                  "INDEMNITY AMOUNT" means an amount equal to one hundred
percent (100%) of a claim for indemnification under this Agreement computed on
an After-Tax Basis.

                  "INDEPENDENT PUBLIC ACCOUNTANTS" means a firm of independent
nationally recognized accountants mutually selected by Parent and Pacific USA.

                  "IRS" means the Internal Revenue Service and any successor
federal agency.

                  "PACIFIC USA" is defined in the introductory paragraph to this
Agreement.

                  "PACIFIC USA GROUP" means the Affiliated Group which includes
the Stockholders and the Companies.

                  "PARENT" is defined in the introductory paragraph to this
Agreement.

                  "PRE-ACQUISITION TAXABLE PERIOD" means all or a portion of (i)
any taxable period up to and including the Closing Date, or (ii) any taxable
period with respect to which the Tax is computed by reference to Tax Items,
assets, capital or operations of any of the Companies arising on or before the
Closing Date.



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                  "POST-ACQUISITION TAXABLE PERIOD" means all or a portion of
(i) any taxable period after the Closing Date or (ii) any taxable period with
respect to which the Tax is computed by reference to Tax Items, assets, capital
or operations of the Company or a Subsidiary arising after the Closing Date.

                  "PROCEEDING" is defined in Section 4.3(b) below.

                  "PURCHASED SHARES" is defined in Recital C. above.

                  "RULING" means a formal ruling, a determination letter, a
change in method of accounting letter or any similar announcement issued by the
IRS.

                  "SHARES" means all of the issued and outstanding stock of the
Company.

                  "STOCKHOLDER" is defined in the introductory paragraph to this
Agreement.

                  "STOCKHOLDERS" means the Stockholder and Pacific USA.

                  "STOCKHOLDER SHARES" is defined in Recital A. above.

                  "SUBSIDIARY" OR "SUBSIDIARIES" means, with respect to any
other corporation, any corporation of which such corporation (either alone or
through or together with any other entity), owns, directly or indirectly,
sufficient stock to cause the corporations to be in the same Affiliated Group.

                  "TAX" OR "TAXES" means any Tax or Taxes as defined in the
Acquisition Agreement other than Property Taxes.

                  "TAX ALLOCATION AGREEMENT" means the Tax Allocation Agreement
dated April 28, 1992, by and among Pacific USA, Pacific American Homes, Inc.,
Lifescape Development Corporation, Pacific Southwest Bank, F.S.B. and others as
amended by Amendment No. 1 dated January 27, 1998.

                  "TAX DISCLOSURE LETTER" means the disclosure letter delivered
by or on behalf of Pacific USA or Stockholder to the Parent at or prior to
execution of this Agreement.

                  "TAX ITEMS" is defined in Section 3.2(a) below.

                  "TAX LIABILITY ISSUE" is defined in Section 4.3(a) below.

                  "TAX RETURN" OR "TAX RETURNS" means any Federal or state
income tax return, (including any schedule or attachment thereto) and any
amendment thereof required to be filed with IRS in connection with any Tax.

                  "TREASURY REGULATION" OR "TREASURY REGULATIONS" means any
regulation promulgated under the Code including any amendments or any substitute
or successor provisions thereto.



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                                   ARTICLE II

                                    COVENANTS

         2.1 PREPARATION AND FILING OF TAX RETURNS: PAYMENT OF TAXES.
Stockholders (with respect to the Companies) and the Companies shall prepare and
file on or before the due date therefor (taking into account properly and timely
granted extensions), all Tax Returns required to be filed by the Stockholders
(with respect to the Companies) and the Companies (except for any Tax Return for
which an extension has been properly and timely granted) on or before the
Closing Date, and shall pay, or cause the Companies to pay, all Taxes (including
estimated Taxes) due at such time on such Tax Returns (or due with respect to
Tax Returns for which an extension has been properly and timely granted) or
which are otherwise required to be paid prior to or during such period. As to
all Tax Returns prepared and filed pursuant to this Section 2.1, the Parent
shall cause the Companies to execute such Tax Returns if filed after the Closing
Date.

         2.2. NOTIFICATION OF TAX PROCEEDINGS. Between the date hereof and the
Closing Date, to the extent the Stockholders or the Companies have actual
knowledge of the commencement or scheduling of any Tax audit, the assessment of
any Tax, the issuance of any notice of Tax due or any bill for collection of any
Tax due for Taxes, or the commencement or scheduling of any other administrative
or judicial proceeding with respect to the determination, assessment or
collection of any Tax of the Stockholders (with respect to the Companies) or of
any of the Companies, the Stockholders shall provide prompt notice to the Parent
of such matter, setting forth information (to the extent known) describing any
asserted Tax liability in reasonable detail and including copies of any notice
or other documentation received from the applicable Tax Authority with respect
to such matter.

         2.3. TAX ELECTIONS, WAIVERS AND SETTLEMENTS. The Stockholders (with
respect to the Companies) and the Companies shall not take any of the following
actions after the date hereof without the prior written consent of Parent, which
shall not be unreasonably withheld or delayed:

                  (a) make, revoke or amend any Tax election which materially
         affects the Tax obligation of the Companies other than as necessary to
         prepare and file a Tax Return;

                  (b) execute any waiver of restrictions on assessment or
         collection of any material Tax (other than waivers relating to
         extensions); or

                  (c) enter into or amend any agreement or settlement with the
         IRS or any state Tax Authority responsible for the administration of
         any Tax which materially affects the Tax obligation of the Companies.

         2.4. TERMINATION OF EXISTING TAX SHARING AGREEMENTS. All tax sharing
agreements or similar arrangements with respect to or involving the Companies
(including, for example, the Tax Allocation Agreement) shall be terminated with
respect to the Companies after the Closing Date and, after the Closing Date,
neither the Stockholders and their Affiliates, on the one hand, nor the
Companies, on the other hand, shall be bound thereby or have any liability
thereunder to the other party for amounts due in respect of periods after the
Closing Date. Notwithstanding the foregoing,



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however, the Companies shall remain subject to the Tax Allocation Agreement for
the taxable period in which the Closing Date occurs such that the Companies
remain obligated and will promptly pay to the Stockholders when calculated an
amount equal to the excess of 35% of their taxable income (excluding the taxable
income resulting from the Section 338(h)(10) Elections) included in the Federal
consolidated income Tax Return with the Stockholders for such period over the
amounts paid to the Stockholders with respect to such period by the Companies
prior to the Closing Date.

                                   ARTICLE III

                            TAX ELECTIONS AND RETURNS

         3.1 SECTION 338(H)(10) ELECTIONS. Pacific USA as the common parent of
the affiliated group of corporations filing a consolidated federal income Tax
Return which includes the Company and the Subsidiaries (the "SELLER GROUP") and
Parent agree that they will join together in making a timely, irrevocable and
effective election under section 338(h)(10) of the Code and a similar election
under any applicable state income tax law (collectively, the "SECTION 338(H)(10)
ELECTIONS") with respect to Parent's purchase of the Shares. To facilitate such
election, within 180 days after the Closing Date, Parent shall prepare and
deliver to Pacific USA for its review and approval (which approval shall not be
unreasonably withheld) an Internal Revenue Service Form 8023 and any similar
forms under applicable state income tax law (the "FORMS") with respect to
Parent's purchase of the Shares. Parent and Pacific USA shall then cooperate to
cause the Forms to be completed and executed by authorized persons for Parent
and Pacific USA. Parent shall duly and timely file the Forms as prescribed by
Treasury Regulation 1.338(h)(10)-1 or the corresponding provisions of applicable
state income Tax law and shall provide a copy of the executed Forms and any
accompanying schedules to Pacific USA when filed.

         3.2 PREPARATION AND FILING OF TAX RETURNS.

                  (a) With respect to each Tax Return covering a taxable period
         ending on or before the Closing Date that is required to be filed after
         the Closing Date for, by or with respect to any of the Companies (other
         than the Tax Returns described in paragraph (c) of this Section 3.2),
         Stockholders shall cause such Tax Return to be prepared, shall cause to
         be included in such Tax Return all items of income, gain, loss,
         deduction and credit or other items (collectively "TAX ITEMS") required
         to be included therein, and shall deliver the original of such Tax
         Return to Parent at least 30 days prior to the due date (including
         extensions) of such Tax Return. Stockholders shall pay to Parent the
         amount of Tax shown on each such Tax Return (to the extent it has not
         been previously paid or accrued in the financial statements contained
         in the most recently filed Company Reports) not less than 5 days prior
         to the due date of such Tax Return. Parent shall cause such Tax Return
         to be filed timely with the appropriate Taxing Authority and to pay the
         amount of Taxes shown to be due on such Tax Return. Parent shall cause
         to be prepared and timely filed all Tax Returns for any taxable period
         beginning after the Closing Date and shall pay all Taxes required to be
         shown thereon.

                  (b) With respect to each Tax Return covering a taxable period
         beginning on or before the Closing Date and ending after the Closing
         Date by or with respect to any of the Companies (other than the Tax
         Returns described in paragraph (c) of this Section 3.2), Parent



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         shall cause such Tax Return to be prepared and shall cause to be
         included in such Tax Return all Tax Items required to be included
         therein. Parent shall determine in good faith (by an interim closing of
         the books as of the Closing Date except for ad valorem Taxes and
         franchise Taxes based on capital which shall be prorated on a daily
         basis) the portion, if any, of the Tax due with respect to the period
         covered by such Tax Return which is attributable to any of the
         Companies for a Pre-Acquisition Taxable Period. At least 30 days prior
         to the due date (including extensions) of such Tax Return, Parent shall
         deliver to Stockholders for their review and approval (which shall not
         be unreasonably withheld) a copy of such Tax Return and of its
         determinations. Upon approval, Stockholders shall pay to Parent the
         portion of the Taxes attributable to the Pre-Acquisition Taxable Period
         (which has not been previously paid or accrued in the financial
         statements contained in the most recently filed Company Reports) not
         less than 5 days prior to the due date of such Tax Return. Parent shall
         cause the Tax Return to be filed timely with the appropriate Taxing
         Authority and to pay timely the amount of Taxes shown to be due on such
         Tax Return.

                  (c) Stockholders shall cause to be included in the
         consolidated federal income Tax Returns (and the state income Tax
         Returns of any state that permits consolidated, combined or unitary
         income Tax Returns, if any) of the Pacific USA Group for all periods
         ending on or before or which include the Closing Date, all Tax Items of
         the Companies which are required to be included therein, shall file
         timely all such Tax Returns with the appropriate taxing authorities and
         shall pay timely all Taxes due with respect to the periods covered by
         such Tax Returns.

                  (d) Any Tax Return to be prepared pursuant to the provisions
         of this Section 3.2 shall be prepared in a manner consistent with
         practices followed in prior years with respect to similar Tax Returns,
         except for changes required by changes in law.

         3.3 REFUNDS OF TAXES, AMENDED RETURNS, AND CARRYOVERS.

                  (a) If the Parent or the Companies receive a Tax refund with
respect to Taxes attributable to a Pre-Acquisition Taxable Period, Parent and/or
the Companies, as applicable, will pay, within the fifteen (15) days following
the receipt of such Tax refund, the amount of such Tax refund to Pacific USA. If
the Stockholders or their Affiliates receive a Tax refund of Taxes attributable
to any Post-Acquisition Taxable Period, within fifteen (15) days following the
receipt of such Tax refund, the Stockholders and/or their Affiliates, as
applicable, will pay the amount of such Tax refund to the Parent.

                  (b) Any amended Tax Return or claim for Tax refund for any
taxable period ending on or before the Closing Date shall be filed, or caused to
be filed, only by the Stockholders, which shall not be obligated to make (or
cause to be made) such filing. Any amended Tax Return or claim for Tax refund
for any taxable period that begins after the Closing Date shall be filed, or
caused to be filed, only by the Parent, which shall not be obligated to make (or
cause to be made) such filing. Any amended Tax Return or claim for Tax refund
for any taxable period that begins before and ends after the Closing Date shall
be filed, or caused to be filed, only with the mutual consent of the Parent and
Pacific USA.



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                                   ARTICLE IV

                 STOCKHOLDERS' TAX INDEMNIFICATION; TAX CONTESTS

         4.1. INDEMNIFICATION BY STOCKHOLDERS. From and after the Closing Date,
each of the Stockholders on a joint and several basis shall protect, defend,
indemnify and hold harmless Parent, its Affiliates and the Companies from any
and all Taxes (including, without limitation, any obligation to contribute to
the payment of any Taxes determined on a consolidated basis with respect to a
group of entities that includes or included any of the Companies, the
Stockholders and/or other Affiliates of the Stockholders) and all costs and
expenses (including, without limitation, litigation costs and reasonable
attorneys' and accountants' fees and disbursements) incurred as a result of: (i)
any Taxes of the Companies attributable to any Pre-Acquisition Taxable Period
(other than Taxes which have been previously paid or accrued in the financial
statements contained in the most recently filed Company Reports); (ii) any Taxes
of any corporation (other than the Companies) that is or was a member of any
affiliated group of corporations of which any of the Companies was a member at
any time on or prior to the Closing Date; (iii) any Taxes resulting from the
Section 338(h)(10) Elections; and (iv) a breach of the representations relating
to Taxes contained in Section 4.9 of the Acquisition Agreement, which
representations shall survive Closing until the expiration of the applicable
statute of limitations period.

         4.2. INDEMNIFICATION BY PARENT. From and after the Closing Date, Parent
shall protect, defend, and indemnify and hold harmless Stockholders and their
Affiliates for any Taxes and all costs and expenses (including, without
limitation, litigation costs and reasonable attorneys' and accountants' fees and
disbursements) incurred as a result of a claim, notice of deficiency, or
assessment by, or any obligation owing to, any Tax Authority for any Taxes of
the Companies attributable to any Post-Acquisition Taxable Period.

         4.3. CONTEST PROVISIONS.

                  (a) Parent, on the one hand, and the Stockholders, on the
other hand, will (A) promptly inform the other of any investigations, audit or
other proceedings and use reasonable efforts to keep the other advised as to the
status of Tax audits and litigation involving any Taxes that could give rise to
a liability under this Agreement or increase the Tax obligation of the other
party (a "TAX LIABILITY ISSUE"), (B) promptly furnish to the others copies of
any inquiries or requests for information from any Tax Authority concerning any
Tax Liability Issue, (C) timely notify the others regarding any proposed written
communication (i.e., communications not relating to inquiries or requests for
information) to a Tax Authority with respect to such Tax Liability Issue, (D)
promptly furnish to the other upon receipt a copy of information or document
requests, a notice of proposed adjustment, revenue agent's report or similar
report or notice of deficiency together with all relevant documents, Tax Returns
and memos related to the foregoing documents, notices or reports, relating to
any Tax Liability Issue, (E) give the other and its or their accountants and
counsel the reasonable opportunity to review and comment in advance (if
reasonably possible) on all written submissions, filings and any other
information relevant to any Tax Liability Issue, and (F) consider in good faith
any suggestions made by the other and its or their accountants and counsel to
submit documentation or attend those portions of any meetings and proceedings
that relate to such proposed adjustment; provided, however, that the failure of
one party to so notify the other party of any such audit or Tax



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controversy shall not affect the other party's obligations under this Agreement
except to the extent such Party can demonstrate that it has been prejudiced or
adversely affected thereby. Notwithstanding the foregoing, Parent, on the one
hand, and the Stockholders, on the other hand, may make appropriate redactions
in the submissions, filings and any other information provided to the other to
preserve the confidentiality of such information as to issues that are not Tax
Liability Issues.

                  (b) Parent will have full responsibility for and discretion in
handling, at Parent's expense, any Tax controversy, including, without
limitation, an audit, a protest to the Appeals Division of the IRS, and
litigation in Tax Court or any other court of competent jurisdiction involving
the Companies (a "PROCEEDING") as to Taxes of the Companies attributable to Post
Acquisition Taxable Periods. The Stockholders will have full responsibility and
discretion in handling, at Stockholders' expense, any Proceeding as to any Taxes
of the Companies attributable to Pre-Acquisition Taxable Periods. The
Stockholders will not settle any such Proceeding in a manner which would
adversely affect the Parent or the Companies after the Closing Date without the
prior written consent of Parent, which shall not be unreasonably withheld. The
Parent and Affiliates will not settle any such Proceeding in a manner which
would adversely affect either of the Stockholders or their Affiliates without
the prior written consent of the Stockholders, which shall not be unreasonably
withheld.

         4.4. CLAIMS FOR, AND PAYMENT OF, INDEMNITY AMOUNT.

                  (a) Whenever any claim is made for indemnification or another
obligation under this Agreement, (including obligations pursuant to the Tax
Allocation Agreement) the party claiming such indemnification ("CLAIMANT") shall
notify the party against whom indemnification is sought ("INDEMNIFYING PARTY")
promptly after the Claimant has knowledge of any event which might give rise to
a claim for indemnification under this Agreement.

                  (b) The failure by the Claimant to give notice of a claim as
required in Section 4.4(a) above or a delay in giving such notice shall not
affect the validity or amount of such claim and the indemnification obligations
of the Indemnifying Party shall remain in effect as to such claim, except to the
extent that the Indemnifying Party can demonstrate that it has been prejudiced
or adversely affected thereby.

                  (c) Within five days of any Final Determination of any claim
for indemnification under this Agreement, the Claimant shall provide a detailed
written notice to the Indemnifying Party explaining and substantiating the
calculation of the Indemnity Amount. The Indemnifying Party shall pay the
Indemnity Amount to the Claimant on the last to occur of (i) fifteen (15) days
after receipt of such notice, (ii) thirty (30) days after any Final
Determination or (iii) fifteen (15) days after the final determination of the
calculation of the Indemnity Amount owed by the Indemnifying Party to the
Claimant under Section 4.4(d) below; provided, such amount is not in dispute and
subject to arbitration as provided herein.

                  (d) If the Indemnifying Party shall disagree with the
Claimant's calculation of the Indemnity Amount and within ten (10) days after
receipt of such calculation requests in writing verification of such amount,
such amount shall be verified by a firm of Independent Public Accountants.
Within 15 days after the Indemnifying Party's request, the Independent Public



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Accountants either (i) shall confirm the accuracy of the Claimant's computation
or (ii) notify the Claimant that such computation is inaccurate. In the case of
(ii) above, the Independent Public Accountants shall recompute the Indemnity
Amount in such a manner as shall enable the Independent Public Accountants to
confirm its accuracy. The costs of such verification shall be borne by the
Indemnifying Party unless such verification shall result in an adjustment in the
Indemnifying Party's favor of the Indemnity Amount computed by the Claimant, in
which case such costs shall be borne by the Claimant. The Claimant agrees to
cooperate with such Independent Public Accountants and, subject to a
confidentiality agreement reasonably satisfactory to the Claimant, to supply
them with all information reasonably necessary to permit them to accomplish such
review and determination. Such information shall be for the confidential use of
the Independent Public Accountants and shall not be disclosed to the
Indemnifying Party or to any other person. The Indemnifying Party and Claimant
agree that the sole responsibility of the Independent Public Accountants shall
be to verify the amount of the Indemnity Amount pursuant to this Section 4.4(d)
and the matters of interpretation of this Agreement are not within the scope of
the Independent Public Accountant's responsibility. If the Claimant and
Indemnifying Party still do not agree as to liability (including the amount of
liability), the dispute shall be resolved by arbitration pursuant to Section
6.14 if any party requests.

         4.5. SURVIVAL. The representations, warranties, covenants and
indemnification obligations arising under this Agreement and in any other
certificates or documents delivered in connection with this Agreement shall
survive the Closing and Closing Dates and shall continue in full force and
effect and shall not terminate until, and no indemnification claims and
obligations arising thereto shall survive beyond, ninety (90) days after all
applicable statute of limitations (including any waivers or extensions) have
expired for such claims not brought prior to such date.

         4.6. OFFSET. If any party for any reason fails or refuses to perform
fully its obligations or indemnifications under this Agreement, the Claimant
shall have the right of offset with respect to any payments which are due or
shall become due under this Agreement, the Acquisition Agreement or any other
agreement between or among such party or the Claimant. The foregoing provisions
of this Section 4.6 are permissive, and a failure by a Claimant to exercise its
rights under this Section 4.6 shall not affect its right to indemnification
under this Agreement.

         4.7. EXPENSES. Except as otherwise specifically provided in this
Agreement, each party shall bear its own expenses incurred in connection with a
Tax Liability Issue for which such party and its Affiliates are liable under
this Agreement.



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                                    ARTICLE V

                     COOPERATION, ACCESS TO TAX INFORMATION,
                       CONFIDENTIALITY AND FURTHER ACTION

         5.1. ACCESS TO INFORMATION. After the Closing Date, each party shall,
upon the request of the other party, in connection with the preparation by the
parties of Tax Returns, Tax contests or for other Tax purposes as the other
party shall reasonably request, (a) provide to the officers and other authorized
representatives of the requesting party access, during normal business hours
upon reasonable advance notice, to any premises, properties, files, books,
records, documents and other information of the Stockholders (with respect to
the Companies) or any of the Companies, (b) cause its officers to furnish to the
requesting party and its authorized representatives any and all relevant
financial, technical and operating data and other information pertaining to the
Stockholders (with respect to the Companies) or any of the Companies that is
regularly maintained by such party, (c) make available to the requesting party
and its authorized representatives personnel to consult with such persons, and
(d) make available for inspection and copying by the requesting party at the
requesting party's expense true and complete copies of any documents relating to
the foregoing; provided, however, that the requesting party and its
representatives shall not interfere with the other party's normal business
operations. All such written information and records shall be provided in a
reasonably timely manner following the receipt of a written request therefor
from the requesting party.

         5.2. RECORD RETENTION. The Stockholders, on the one hand, and the
Parent, on the other hand, shall retain, until the applicable statutes of
limitations (including any waivers or extensions) have expired, copies of all
Tax Returns, supporting work schedules and other records or information which
may be relevant to such Tax Returns for all taxable periods or portions thereof
ending after 1995 before or including the Closing Date and shall not destroy or
otherwise dispose of any such records prior to four years after filing the
applicable return without first providing the other party with a reasonable
opportunity to review and copy the same.

         5.3. CONFIDENTIALITY. Each party shall hold, and shall use its best
efforts to cause its Affiliates to hold, in strict confidence from any person
(other than any such Affiliate), all documents and information concerning the
other party or any of its Affiliates furnished to it by the other party in
connection with this Agreement or the transactions contemplated hereby, unless
(a) required to disclose any such information by judicial or administrative
process or (b) disclosed in an action or proceeding brought by any party in
pursuit of its rights or in the exercise of its remedies under this Agreement.
Notwithstanding the foregoing, this Section 5.3 shall not apply to such
documents or information that were (i) in the public domain through no fault of
such receiving party, or (ii) later acquired by such receiving party from
another source if such receiving party is not aware that such source is under an
obligation to the other party to keep such documents and information
confidential.



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         5.4.     FURTHER ACTION.

                  (a) Upon the terms and subject to the conditions of this
Agreement, the parties shall use all reasonable efforts to take, or cause to be
taken, all reasonable actions, and to do, or cause to be done, all other things
reasonably necessary, proper or advisable to consummate and make effective as
promptly as reasonably practicable the matters contemplated by this Agreement
and otherwise to satisfy or cause to be satisfied in all material respects all
conditions precedent to their obligations under this Agreement.

                  (b) Upon request, each of the parties will use their
reasonable best efforts to obtain any certificate or other document from the
appropriate Tax Authority or any other person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the matters contemplated by this Agreement or the
transaction contemplated by the Acquisition Agreement).

                  (c) Upon request, each of the parties will provide the other
with all reasonable information that either party may be required to report
pursuant to Code 6043 and the underlying Treasury Regulations.

                                   ARTICLE VI

                                  MISCELLANEOUS

         6.1 ENTIRE AGREEMENT; ASSIGNMENT

                  (a) This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and thereof.

                  (b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of each other
party hereto in their sole and absolute discretion. Any such assignment without
the express written consent of the other parties shall be void ab initio. No
assignment of this Agreement shall relieve the assigning party of the
obligations hereunder.

         6.2. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.

         6.3 NOTICES. All notices, requests, clause, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or telecopier to the
respective parties as follows:

         If to the Company:

                  Newmark Homes Corp.
                  1200 Soldiers Field Drive
                  Sugar Land, TX 77479
                  Attention:  Terry White
                  Facsimile Number: 281-243-0168



                                       11
<PAGE>   12

         with a copy to:

                  Brian Sokolik
                  Vinson & Elkins L.L.P.
                  2300 First City Tower
                  1001 Fannin Street
                  Houston, TX  77002-6760
                  Facsimile Number: 713-615-5618

         If to Parent:

                  Yannis Delikanakis
                  Technical Olympic USA, Inc.
                  c/o Technical Olympic S.A.
                  20 Solomou Street
                  Ana Kalamaki
                  Athens, Greece 17456
                  Facsimile Number: 011 301 9955586

         with a copy to

                  Brian Sokolik
                  Vinson & Elkins L.L.P.
                  2300 First City Tower
                  1001 Fannin Street
                  Houston, TX  77002-6760
                  Facsimile Number: 713-615-5618

         If to Stockholder or Pacific USA:

                  Pacific USA Holding Corp.
                  2740 North Dallas Parkway, Suite 200
                  Dallas, TX  75093-4705
                  Attention: Bill C. Bradley, CEO
                  Facsimile Number:  (972) 543-1501

         with a copy to:

                  Pacific USA Holdings Corp.
                  3200 Southwest Freeway, Suite 1220
                  Houston, TX  77027
                  Attention: General Counsel
                  Facsimile Number:  (713) 871-0155



                                       12
<PAGE>   13

or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.

         6.4. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof,
except to the extent that the laws of another jurisdiction govern the internal
affairs of any entity that is a party to this Agreement.

         6.5. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.

         6.6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

         6.7. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.

         6.8. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall have the right of
specified performance and injunctive relief to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
United States or state court having competent jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity and
all such rights and remedies shall be cumulative.

         6.9. MODIFICATION OR AMENDMENT. The parties hereto may modify or amend
this Agreement only by written agreement executed and delivered by duly
authorized officers of the respective parties. Notwithstanding anything in this
Agreement or any other agreement (including, for example, the Acquisition
Agreement) to the contrary, in the event and to the extent that there shall be a
conflict between the provisions of this Agreement and any other agreement, the
provisions of this Agreement shall control.

         6.10. TERM. This Agreement shall commence on the date of execution
indicated below and shall continue in effect until otherwise agreed to in
writing by the parties or their successors.

         6.11. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner



                                       13
<PAGE>   14

adverse to any party. Upon any such determination, the parties shall negotiate
in good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties.

         6.12. NO WAIVER. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by both parties. The failure or delay of either party to require performance by
the other party of any provision of this Agreement shall not affect its right to
require performance of such provision unless and until such performance has been
waived by such party in writing in accordance with the terms hereof. No waiver
by either party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, shall be cumulative
and not alternative.

         6.13. LATE PAYMENTS, INTEREST. Any late payment by any party hereto of
any of its obligations under this Agreement shall bear interest at the rate of
10% per annum; provided, such rate shall not exceed the maximum non usurious
rate permitted by applicable law.

         6.14. ARBITRATION. If the parties are unable to resolve any dispute
relating to this Agreement, the matter must be taken to arbitration to resolve
the dispute if requested by any party. The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and shall take place in Harris County, Texas.


                            [Signature pages follows]



                                       14
<PAGE>   15

            [Signature Page " Tax Indemnity And Allocation Agreement]

         IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.


"THE COMPANY"

Newmark Homes Corp.


By: /s/ Lonnie M. Fedrick
   -------------------------------
Name: Lonnie M. Fedrick
     -----------------------------
Title: President
      ----------------------------


"STOCKHOLDER"

Pacific Realty Group, Inc.


By: /s/ Michael K. McCraw
   -------------------------------
Name: Michael K. McCraw
     -----------------------------
Title: President
      ----------------------------


"PACIFIC USA"

Pacific USA Holdings Corp.


By: /s/ Michael K. McCraw
   -------------------------------
Name: Michael K. McCraw
     -----------------------------
Title: Chief Financial Officer
      ----------------------------



<PAGE>   16

       [Signature Page Continued " Tax Indemnity and Allocation Agreement]



"PARENT"


Technical Olympic USA, Inc.



By: /s/ Constantine Stengos
   ------------------------------------
Name: Constantine Stengos
     ----------------------------------
Title: President and Managing Director
      ---------------------------------