<PAGE>   1
                                                                   EXHIBIT 10.4

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this "Agreement") is made as of
the 12th day of May 2000, effective as of January 1, 2000 (the "Effective
Date"), by and between NEWMARK HOME CORPORATION, a Nevada corporation (the
"Employer"), and LONNIE M. FEDRICK, an individual residing in Sugar Land, Texas
(the "Employee").

                                    RECITALS

The Employer, its divisions, subsidiaries, and other affiliated entities, are
primarily engaged in the business of constructing single-family residences. The
Employer and the Employee entered into an Employment Agreement dated January 1,
1998 (the "Employment Agreement"), the intent and purpose being to specify the
terms and conditions of Employee's employment with the Employer. The Employer
and the Employee desire to amend the terms and conditions of the employment with
the Employer and hereby enter into this Agreement as of the Effective Date.

                                    AGREEMENT

The parties, intending to be legally bound, agree as follows:

1.       DEFINITIONS

For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.

         "AEBIT" means actual consolidated earnings before income taxes for the
         Newmark Entities as determined by an independent audit of such entities
         for the years ended December 31, 2000, 2001 and 2002.

         "Agreement"--the Employment Agreement, as amended from time to time,
         including this Agreement.

         "Base Salary"--as defined in Section 3.1(a).

         "Basic Compensation" means Base Salary and Benefits.

         "BEBIT" and "Target Amount" are used interchangeably and mean the
         budgeted earnings before income taxes for the Newmark Entities as has
         been established by the Special Benefits Committee of the Board of
         Directors of Newmark Homes Corp. (the "special Benefits Committee") and
         the Employee prior to the date of this Agreement for the calendar year
         2000 and shall be agreed to prior to the end of the first quarter of
         2001 and 2002 for calendar years 2001 and 2002, respectively. If the
         parties are unable to agree on the BEBIT for 2001, the Target Amount
         shall be 110% of the BEBIT for the prior calendar year. If the parties
         are unable to agree on the BEBIT for 2002, the Target Amount shall be
         the BEBIT for 2000 compounded at 110%.





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         "Benefits"--as defined in Section 3.1(b).

         "Board of Directors" means the Board of Directors of Newmark Homes
         Corp.

         "Bonus Plan"--as defined in Section 3.1 (c).

         "Confidential Information" means any and all intellectual property of
         the Employer (or any of its affiliates), including but not limited to:

          (a)  trade secrets concerning the business and affairs of the Employer
               (or any of its affiliates), product specifications, data,
               know-how, formulae, compositions, processes, designs, sketches,
               photographs, graphs, drawings, samples, inventions and ideas,
               past, current, and planned research and development, current and
               planned manufacturing or distribution methods and processes,
               customer lists, current and anticipated customer requirements,
               price lists, market studies, business plans, computer software
               and programs (including object code and source code), computer
               software and database technologies, systems, structures, and
               architectures (and related formulae, compositions, processes,
               improvements, devices, know-how, inventions, discoveries,
               concepts, ideas, designs, methods and information), and any other
               information, however documented, that is a trade secret under
               federal, state or other applicable law; and

          (b)  information concerning the business and affairs of the Employer
               (or any of its affiliates) (which includes historical financial
               statements, financial projections and budgets, historical and
               projected sales, capital spending budgets and plans, the names
               and backgrounds of key personnel, personnel training and
               techniques and materials), however documented; and

          (c)  notes, analysis, compilations, studies, summaries, and other
               material prepared by or for the Employer (or any of its
               affiliates) containing or based, in whole or in part, on any
               information included in the foregoing.

         "Disability"-- as defined in Section 4.2.

         "Effective Date" means the date stated in the first paragraph of this
         Agreement or, if applicable for the period prior to January 1, 2000,
         the Effective Date set forth in the Employment Agreement.

         "Employee Invention" means any idea, invention, technique,
         modification, process, or improvement (whether patentable or not), any
         industrial design (whether registerable or not), any mask work, however
         fixed or encoded, that is suitable to be fixed, embedded or programmed
         in a semiconductor product (whether recordable or not), and any work of
         authorship (whether or not copyright protection may be obtained for it)
         created, conceived, or developed by the Employee, either solely or in
         conjunction with others, during the Employment Period or at any time
         prior to the Employment Period that Employee was an employee of
         Employer, or a period that includes a portion of the Employment Period,
         that relates in any way to, or is useful in any manner in, the business






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         then being conducted or proposed to be conducted by the Employer, and
         any such item created by the Employee, either solely or in conjunction
         with others, following termination of the Employee's employment with
         the Employer, that is based upon or uses Confidential Information.

         "Employment Period" means the term of the Employee's employment under
         this Agreement.

         "Fiscal Year" means the Employer's fiscal year, as it exists on the
         Effective Date or as changed from time to time.

         "For cause"--as defined in Section 4.3.

         "Percentage of Target Amount Achieved" shall be determined by dividing
         the AEBIT by the BEBIT.

         "Person" means any individual, corporation (including any nonprofit
         corporation), general or limited partnership, limited liability
         company, joint venture, estate, trust, business trust, association,
         organization, or governmental body.

         "Post-Employment Period"-- as defined in Section 5.2.

         "Newmark Entities" shall mean the Employer and all of its subsidiaries,
         whether wholly-owned or not wholly-owned and whether direct or
         indirect.

         "Target Amount"--see BEBIT defined above.

2.       EMPLOYMENT TERMS AND DUTIES

2.1      EMPLOYMENT

         The Employer hereby employs the Employee, and the Employee hereby
         accepts employment by the Employer, upon the terms and conditions set
         forth in this Agreement.

2.2      TERM

         The term of the Employee's employment with the Employer pursuant to the
         Employment Agreement commenced on January 1, 1998 and shall continue
         pursuant to this Agreement on the Effective Date and end on December
         31, 2002, unless terminated earlier in accordance with the provisions
         of Section 4 herein. Employer and Employee may extend the term of this
         Agreement by execution of a written amendment hereto, setting forth the
         terms of such extension. If the parties fail to execute such written
         amendment, but the employment relationship has continued by mutual
         consent, then the terms of such employment shall be deemed to be on a
         month-to-month basis.




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2.3      DUTIES

         The Employee has served as President and Chief Executive Officer of the
         Employer since January 1, 1998 pursuant to the Employment Agreement,
         will continue to serve in such position for the remaining term of this
         Agreement and will have such duties as are assigned or delegated to the
         Employee by the Board of Directors of Newmark Homes Corp. The Employee
         will devote his full business time, attention, skill, and energy
         exclusively to the business of the Employer, will use his best efforts
         to promote the success of the Employer's business, and will cooperate
         fully with the Board of Directors of Employer in the advancement of the
         best interests of the Employer. Nothing in this Section 2.3, however,
         will prevent the Employee from engaging in additional activities in
         connection with personal investments and community affairs that are not
         inconsistent with the Employee's duties under this Agreement. If the
         Employee is elected an officer of any of Employer's affiliates, the
         Employee will fulfill his duties as such officer without additional
         compensation.

3.       COMPENSATION

         The compensation and other benefits payable to the Employee under this
         Agreement shall constitute the full consideration to be paid to the
         Employee for all services to be rendered by the Employee for the
         Employer, its divisions, subsidiaries and other affiliated entities.

3.1      BASIC COMPENSATION

         (a)      The Employee will be paid an annual salary as set forth below
                  ("Base Salary"), which will be payable in equal periodic
                  installments according to the Employer's customary payroll
                  practices, but no less frequently than monthly.

<TABLE>
<CAPTION>
                Calendar Year                   Base Salary
                -------------                   -----------
<S>                                             <C>
                1998                            $400,000.00
                1999                            $450,000.00
                2000                            $525,000.00
                2001                            $550,000.00
                2002                            $575,000.00
</TABLE>

         (b)      The Employee will, during the Employment Period, be permitted
                  to participate in such pension, profit sharing, life
                  insurance, hospitalization, major medical and other employee
                  benefit plans of the Employer that may be in effect from time
                  to time, to the extent Employee is eligible under the terms of
                  those plans (collectively, the "Benefits").

                  (c) Employee has participated in an annual bonus plan pursuant
                  to the Employment Agreement for the calendar years 1998 and
                  1999 and, subject to shareholder approval at the annual
                  shareholder meeting in year 2000 or at any shareholder meeting
                  held thereafter, shall be entitled to participate in an annual
                  bonus plan in accordance with this Agreement for each calendar
                  year thereafter




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                  (collectively, the "Bonus Plan" or "Bonus Plans"). Employee
                  shall be entitled to a cash bonus for each calendar year
                  commencing on or after January 1, 2000 in an amount equal to
                  the product of the Employee's Base Salary for such calendar
                  year (determined at the time the Target Amount is established
                  by the Special Benefits Committee and disregarding any
                  subsequent increase thereof) multiplied by the Percentage of
                  Target Amount Achieved and subject to certification by the
                  Special Benefits Committee. Notwithstanding the foregoing, the
                  Employee's Bonus with respect to any calendar year shall not
                  exceed $1,150,000.

4.       TERMINATION

4.1      EVENTS OF TERMINATION

         The Employment Period, the Employee's Basic Compensation, and any and
         all other rights of the Employee under this Agreement or otherwise as
         an employee of the Employer will terminate (except as otherwise
         provided in this Section 4):

         (a)      upon the death of the Employee;

         (b)      upon the disability of the Employee (as defined in Section
                  4.2) immediately upon notice from either party to the other;

         (c)      for cause (as defined in Section 4.3), immediately upon notice
                  from the Employer to the Employee, or at such later time as
                  such notice may specify; or

         (d)      on December 31, 2002.

4.2      DEFINITION OF DISABILITY

         For purposes of Section 4.1, the Employee will be deemed to have a
         "disability" if, for physical or mental reasons, the Employee is unable
         to perform the essential functions of the Employee's duties under this
         Agreement for 120 consecutive days, or 180 days during any twelve (12)
         month period, as determined in accordance with this Section 4.2. The
         disability of the Employee will be determined by a medical doctor
         selected by written agreement of the Employer and the Employee upon the
         request of either party by notice to the other. If the Employer and the
         Employee cannot agree on the selection of a medical doctor, each of
         them will select a medical doctor and the two (2) medical doctors will
         select a third medical doctor who will determine whether the Employee
         has a disability. The determination of the medical doctor selected
         under this Section 4.2 will be binding on both parties. The Employee
         must submit to a reasonable number of examinations by the medical
         doctor making the determination of disability under this Section 4.2,
         and the Employee hereby authorizes the disclosure and release to the
         Employer of such determination and all supporting medical records. If
         the Employee is not legally competent, the Employee's legal guardian or
         duly authorized attorney-in-fact will act in the Employee's stead,
         under this Section 4.2, for the purposes of submitting the Employee to
         the examinations, and providing the authorization of disclosure,
         required under this Section 4.2.





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4.3      DEFINITION OF "FOR CAUSE"

         For purposes of Section 4.1, the phrase "for cause" means: (a) the
         commission of fraud, theft, embezzlement, or similar malfeasance
         involving moral turpitude or the conviction of, or plea of nolo
         contendere to, any felony; (b) gross negligence, nonfeasance,
         dishonesty, willful misconduct or substantial failure to perform
         employment duties in a manner consistent with normal standards of job
         performance after prior evaluation and warning related to such
         standards of job performance; or (c) the appropriation (or attempted
         appropriation) of a material business opportunity of the Employer.

4.4      TERMINATION PAY

         Effective upon the termination of this Agreement, the Employer will be
         obligated to pay the Employee (or, in the event of his death, his
         designated beneficiary as defined below) only such compensation as is
         provided in this Section 4.4, and in lieu of all other amounts and in
         settlement and complete release of all claims the Employee may have
         against the Employer. For purposes of this Section 4.4, the Employee's
         designated beneficiary will be such individual beneficiary or trust,
         located at such address, as the Employee may designate by notice to the
         Employer from time to time or, if the Employee fails to give notice to
         the Employer of such a beneficiary, the Employee's estate.

         (a)      Termination by the Employer for Cause. If the Employer
                  terminates this Agreement for cause, the Employee will be
                  entitled to receive his accrued, but unpaid, Base Salary only
                  through the date such termination is effective. If the
                  Employer terminates this Agreement for cause, as defined in
                  Section 4.3(a) or 4.3(c), Employee shall forfeit his rights to
                  any payment under any Bonus Plan in which Employee
                  participated at the time of termination, whether or not
                  payments under such Bonus Plan have been accrued by Employer.
                  If the Employer terminates this Agreement for cause, as
                  defined in Section 4.3(b), Employee shall be entitled to
                  receive a pro-rated portion of any payment under any Bonus
                  Plan in which Employee participated at the time of
                  termination, based on the actual days worked by the Employee
                  during the fiscal year on which the Bonus Plan is based.
                  Employee shall not be released from the covenants contained in
                  Section 5 hereof.

         (b)      Termination upon Disability. If this Agreement is terminated
                  by either party as a result of the Employee's disability, as
                  determined under Section 4.2, the Employer will pay the
                  Employee (i) his Base Salary through the remainder of the
                  calendar month during which such termination is effective and
                  (ii) a pro-rated portion of any payment under any Bonus Plan
                  in which Employee participated at the time of termination,
                  based on the actual days worked by the Employee during the
                  fiscal year on which the Bonus Plan is based.

         (c)      Termination upon Death. If this Agreement is terminated
                  because of the Employee's death, the Employee's estate will be
                  entitled to receive (i) his Base Salary through the end of the
                  calendar month in which his death occurs and (ii) a pro-rated
                  portion of any payment under any Bonus Plan in which Employee






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                  participated at the time of termination, based on the actual
                  days worked by the Employee during the fiscal year on which
                  the Bonus Plan is based.

         (d)      Termination on December 31, 2002. If on December 31, 2002,
                  this Agreement terminates because the parties have not
                  extended the Term (as provided in Section 2.2 hereof), the
                  Employee shall be entitled to receive (i) any unpaid Base
                  Salary accrued through December 31, 2002, and (ii) a pro-rated
                  portion of any payment under any Bonus Plan in which Employee
                  participated at the time of termination, based on the actual
                  months worked by the Employee during the fiscal year on which
                  the Bonus Plan is based. Employee shall not be released from
                  the covenants contained in Section 5 hereof; provided however,
                  that Employer shall pay Employee an amount equal to one year's
                  Base Salary. Such amount shall be payable in twelve (12) equal
                  monthly installments, determined by dividing Employee's Base
                  Salary, on the last day of Employee's employment with
                  Employer, by 12, with the first such installment being due and
                  payable on the last day of Employee's employment with
                  Employer, and the remaining installments being due and payable
                  on the same date in each succeeding month. Employer shall have
                  the right, at any time, to release Employee from the covenants
                  contained in Section 5 hereof, at which time Employee's right
                  to receive and Employer's obligation to make any installment
                  payment shall terminate.

         (e)      Termination after December 31, 2002. In the event Employer and
                  Employee agree to continue Employee's employment with Employer
                  after December 31, 2002, pursuant to the terms of Section 2.2
                  hereof, such employment shall be continued, unless otherwise
                  agreed in writing, on a month-to-month basis and on the same
                  terms and conditions as set forth herein, and may be
                  terminated by Employer (i) at any time upon thirty (30) days
                  notice, or (ii) immediately, provided that Employer shall pay
                  Employee in a lump sum, an amount equal to one (1) month's
                  Base Salary. Employee shall be entitled to receive a pro-rated
                  portion of any payment under any Bonus Plan in which Employee
                  participated at the time of termination, based on the actual
                  months worked by the Employee during the fiscal year on which
                  the Bonus Plan is based. Employee shall not be released from
                  the covenants contained in Section 5 hereof; provided however,
                  that Employer shall pay Employee an amount equal to one year's
                  Base Salary. Such amount shall be payable in twelve (12) equal
                  monthly installments, determined by dividing Employee's Base
                  Salary, on the last day of Employee's employment with
                  Employer, by 12, with the first such installment being due and
                  payable on the last day of Employee's employment with
                  Employer, and the remaining installments being due and payable
                  on the same date in each succeeding month. Employer shall have
                  the right, at any time, to release Employee from the covenants
                  contained in Section 5 hereof, at which time Employee's right
                  to receive and Employer's obligation to make any installment
                  payment shall terminate.

                  In the event that Employer terminates Employee for cause, as
                  defined in Section 4.3, then the provisions of this Section
                  4.4(e)(i) and (ii) shall not apply, and Employee will be
                  entitled to receive only his accrued, but unpaid, Base Salary






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                  through the date such termination is effective and Employee
                  shall not be released from the covenants contained in Section
                  5 hereof. If the Employer terminates this Agreement for cause,
                  as defined in Section 4.3(a) or 4.3(c), Employee shall forfeit
                  his rights to any payment under any Bonus Plan in which
                  Employee participated at the time of termination, whether or
                  not payments under such Bonus Plan have been accrued by
                  Employer. If the Employer terminates this Agreement for cause,
                  as defined in Section 4.3(b), Employee shall be entitled to
                  receive a pro-rated portion of any payment under any Bonus
                  Plan in which Employee participated at the time of
                  termination, based on the actual days worked by the Employee
                  during the fiscal year on which the Bonus Plan is based.

         (f)      Benefits. The Employee's accrual of, or participation in plans
                  providing for, Benefits, will cease at the effective date of
                  the termination of this Agreement, except as otherwise
                  specifically provided in writing in the documentation for any
                  such Benefit. The Employee will not receive, as part of his
                  termination pay pursuant to this Section 4, any payment or
                  other compensation for any vacation, holiday, sick leave, or
                  other leave unused on the date the notice of termination is
                  given under this Agreement, unless Employer's written
                  personnel policies provide otherwise.

5.       NON-COMPETITION AND NON-INTERFERENCE

5.1      ACKNOWLEDGMENTS BY THE EMPLOYEE

         The Employee acknowledges that: (a) the services to be performed by him
         under this Agreement are of a special, unique, unusual, extraordinary,
         and intellectual character, and (b) the provisions of this Section 5
         are reasonable and necessary to protect the goodwill and other business
         interests of Employer.

5.2      COVENANTS OF THE EMPLOYEE

         In consideration of the acknowledgments by the Employee, and in
         consideration of the compensation and benefits to be paid or provided
         to the Employee by the Employer, the Employee covenants that he will
         not, directly or indirectly:

         (a)      during the Employment Period, except in the course of his
                  employment hereunder, and during the Post-Employment Period
                  (as defined below), without the express prior written consent
                  of Employer (as authorized by its board of directors), as
                  owner, officer, director, employee, stockholder, principal,
                  consultant, agent, lender, guarantor, cosigner, investor or
                  trustee of any corporation, partnership, proprietorship, joint
                  venture, association or any other entity of any nature,
                  engage, directly or indirectly, in any business of siting,
                  permitting, developing, constructing, or selling single-family
                  homes in (i) the following counties in the State of Texas: (1)
                  Harris County and all contiguous counties, (2) Travis County
                  and all contiguous counties, (3) Bexar County and all
                  contiguous counties, (4) Dallas County and all contiguous
                  counties, and (5) any county in which Employer has
                  homebuilding activity during the Employment




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                  Period, and (ii) the following counties in the State of
                  Tennessee: (1) Williamson County and all contiguous counties,
                  and (2) any county in which Employer engages in business
                  during the Employment Period: provided, however, that the
                  Employee may purchase or otherwise acquire up to (but not more
                  than) one percent (1%) of any class of securities of any
                  enterprise (but without otherwise participating in the
                  activities of such enterprise) if such securities are listed
                  on any national or regional securities exchange or have been
                  registered under Section 12(g) of the Securities Exchange Act
                  of 1934;

         (b)      whether for the Employee's own account or for the account of
                  any other person, at any time during the Employment Period
                  (except for the account of Employer and its affiliates) and
                  the Post-Employment Period, solicit business of the same or
                  similar type being carried on by the Employer, from any person
                  known by the Employee to be a customer of the Employer,
                  whether or not the Employee had personal contact with such
                  person during and by reason of the Employee's employment with
                  the Employer;

         (c)      whether for the Employee's own account or the account of any
                  other person (i) at any time during the Employment Period and
                  the Post-Employment Period, solicit, employ, or otherwise
                  engage as an employee, independent contractor, or otherwise,
                  any person who is an employee of the Employer, or in any
                  manner induce, or attempt to induce, any employee of the
                  Employer to terminate his employment with the Employer; or
                  (ii) at any time during the Employment Period and Post
                  Employment Period, interfere with the Employer's relationship
                  with any person, including any person, who at any time during
                  the Employment Period, was an employee, contractor, supplier,
                  or customer of the Employer; provided, however, that nothing
                  in this Section 5.2(c)(ii) shall preclude Employee from
                  soliciting or employing any person, who was employed by
                  Employer, after six (6) months have lapsed from the last date
                  of the former employee's employment with Employer; or

         (d)      at any time during or after the Employment Period, disparage
                  the Employer or any of its shareholders, parents, affiliates,
                  directors, officers, employees, or agents.

         The term "Post-Employment Period" means the one (1) year period
         beginning on the date of termination of the Employee's employment with
         the Employer.

         If any covenant in this Section 5.2 is held to be unreasonable,
         arbitrary, or against public policy, such covenant will be considered
         to be divisible with respect to scope, time, and geographic area, and
         such lesser scope, time, or geographic area, or all of them, as a court
         of competent jurisdiction may determine to be reasonable, not
         arbitrary, and not against public policy, will be effective, binding,
         and enforceable against the Employee. Employee hereby agrees that this
         covenant is a material and substantial part of this Agreement and that
         (i) the geographic limitations are reasonable; (ii) the one (1) year
         term of the covenant is reasonable; and (iii) the covenant is not made
         for the purpose of limiting competition per se and is reasonably
         related to a protectable business interest of the Employer.




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         The period of time applicable to any covenant in this Section 5.2 will
         be extended by the duration of any violation by the Employee of such
         covenant.

         The Employee will, while the covenant under this Section 5.2 is in
         effect, give notice to the Employer, within ten (10) days after
         accepting any other employment, of the identity of the Employee's
         employer. The Employer may notify such employer that the Employee is
         bound by this Agreement and, at the Employer's election, furnish such
         employer with a copy of this Agreement or relevant portions thereof.

6.       NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS

6.1      ACKNOWLEDGMENTS BY THE EMPLOYEE

         The Employee acknowledges that (a) during the Employment Period and as
         a part of his employment, the Employee will be afforded access to
         Confidential Information; (b) public disclosure of such Confidential
         Information could have an adverse effect on the Employer and its
         business; (c) because the Employee possesses substantial technical
         expertise and skill with respect to the Employer's business, the
         Employer desires to obtain exclusive ownership of each Employee
         Invention, and the Employer will be at a substantial competitive
         disadvantage if it fails to acquire exclusive ownership of each
         Employee Invention; and (d) the provisions of this Section 6 are
         reasonable and necessary to prevent the improper use or disclosure of
         Confidential Information and to provide the Employer with exclusive
         ownership of all Employee Inventions.

6.2      AGREEMENTS OF THE EMPLOYEE

         In consideration of the compensation and benefits to be paid or
         provided to the Employee by the Employer under this Agreement, the
         Employee covenants as follows:

         (a)      Confidentiality.

                  (i)      During and following the Employment Period, the
                           Employee will hold in confidence the Confidential
                           Information and will not disclose it to any person
                           other than in connection with the performance of his
                           duties and obligations hereunder, except with the
                           specific prior written consent of the Employer or
                           except as otherwise expressly permitted by the terms
                           of this Agreement.

                  (ii)     Any trade secrets of the Employer will be entitled to
                           all of the protections and benefits under the federal
                           and state trade secret and intellectual property laws
                           and any other applicable law. If any information that
                           the Employer deems to be a trade secret is found by a
                           court of competent jurisdiction not to be a trade
                           secret for purposes of this Agreement, such
                           information will, nevertheless, be considered
                           Confidential Information for purposes of this
                           Agreement. The Employee hereby waives any





                                      -10-
<PAGE>   11

                           requirement that the Employer submit proof of the
                           economic value of any trade secret or post a bond or
                           other security.

                  (iii)    None of the foregoing obligations and restrictions
                           applies to any part of the Confidential Information
                           that the Employee demonstrates was or became
                           generally available to the public other than as a
                           result of a disclosure by the Employee.

                  (iv)     The Employee will not remove from the Employer's
                           premises (except to the extent such removal is for
                           purposes of the performance of the Employee's duties
                           at home or while traveling, or except as otherwise
                           specifically authorized by the Employer) any
                           document, record, notebook, plan, model, component,
                           device, or computer software or code, whether
                           embodied in a disk or in any other form belonging to
                           the Employer or used in Employer's business
                           (collectively, the "Proprietary Items"). The Employee
                           recognizes that, as between the Employer and the
                           Employee, all of the Proprietary Items, whether or
                           not developed by the Employee, are the exclusive
                           property of the Employer. Upon termination of this
                           Agreement, or upon the request of the Employer during
                           the Employment Period, the Employee will return to
                           the Employer all of the Proprietary Items in the
                           Employee's possession or subject to the Employee's
                           control, and the Employee shall not retain any
                           copies, abstracts, sketches, or other physical
                           embodiment of any of the Proprietary Items.

         (b)      Employee Inventions. Each Employee Invention will belong
                  exclusively to the Employer. The Employee acknowledges that
                  all of the Employee's writing, works of authorship and other
                  Employee Inventions are works made for hire and the property
                  of the Employer, including any copyrights, patents, or other
                  intellectual property rights pertaining thereto. If it is
                  determined that any such works are not works made for hire,
                  the Employee hereby assigns to the Employer all of the
                  Employee's right, title, and interest, including all rights of
                  copyright, patent, and other intellectual property rights, to
                  or in such Employee Inventions. The Employee covenants that he
                  will promptly:

                  (i)      disclose to the Employer in writing any Employee
                           Invention;

                  (ii)     assign to the Employer or to a party designated by
                           the Employer, at the Employer's request and without
                           additional compensation, all of the Employee's right
                           to the Employee Invention for the United States and
                           all foreign jurisdictions;

                  (iii)    execute and deliver to the Employer such
                           applications, assignments, and other documents as the
                           Employer may request in order to apply for and obtain
                           patents or other registrations with respect to any
                           Employee Invention in the United States and any
                           foreign jurisdictions;

                  (iv)     sign all other papers necessary to carry out the
                           above obligations; and





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<PAGE>   12

                  (v)      give testimony and render any other assistance but
                           without expense to the Employee in support of the
                           Employer's rights to any Employee Invention.

6.3      DISPUTES OR CONTROVERSIES

         The Employee recognizes that should a dispute or controversy arising
         from or relating to this Agreement be submitted for adjudication to any
         court, arbitration panel, or other third party, the preservation of the
         secrecy of Confidential Information may be jeopardized. All pleadings,
         documents, testimony, and records relating to any such adjudication
         will be maintained in secrecy and will be available for inspection by
         the Employer, the Employee, and their respective attorneys and experts,
         who will agree, in advance and in writing, to receive and maintain all
         such information in secrecy, except as may be limited by them in
         writing.

7.       GENERAL PROVISIONS

7.1      INJUNCTIVE RELIEF AND ADDITIONAL REMEDY

         The Employee acknowledges that the injury that would be suffered by the
         Employer as a result of a breach of the provisions of this Agreement
         (including any provision of Sections 5 and 6) would be irreparable and
         that an award of monetary damages to the Employer for such a breach
         would be an inadequate remedy. Consequently, the Employer will have the
         right, in addition to any other rights it may have, to obtain
         injunctive relief to restrain any breach or threatened breach or
         otherwise to specifically enforce any provision of this Agreement.
         Without limiting the Employer's rights under this Section 7 or any
         other remedies of the Employer, if the Employee breaches any of the
         provisions of Sections 5 and 6 and such breach is proven in a court of
         competent jurisdiction, the Employer will have the right to cease
         making any payments otherwise due to the Employee under this Agreement.



                                      -12-
<PAGE>   13





7.2      COVENANTS OF SECTIONS 5 AND 6 ARE ESSENTIAL AND INDEPENDENT COVENANTS

         The covenants by the Employee in Sections 5 and 6 are essential
         elements of this Agreement, and without the Employee's agreement to
         comply with such covenants, the Employer would not have entered into
         this Agreement or continued the employment of the Employee. The
         Employer and the Employee have independently consulted their respective
         counsel and have been advised in all respects concerning the
         reasonableness and propriety of such covenants, with specific regard to
         the nature of the business conducted by the Employer.

         The Employee's covenants in Section 5 and 6 are independent covenants
         and the existence of any claim by the Employee against the Employer
         under this Agreement or otherwise will not excuse the Employee's breach
         of any covenant in Sections 5 or 6.

         If the Employee's employment hereunder expires or is terminated, this
         Agreement will continue in full force and effect as is necessary or
         appropriate to enforce the covenants and agreements of the Employee in
         Sections 5 and 6.

7.3      LEGAL RECOURSE

         Employee further agrees that these covenants are made to protect the
         legitimate business interests of the Employer. Employee understands as
         a part of these covenants that the Employer intends to exercise
         whatever legal recourse against him for any breach of this Agreement
         and in particular, for any breach of these covenants.

8.       GENERAL PROVISIONS

8.1      WAIVER

         The rights and remedies of the parties to this Agreement are cumulative
         and not alternative. Neither the failure nor any delay by either party
         in exercising any right, power, or privilege under this Agreement will
         operate as a waiver of such right, power, or privilege, and no single
         or partial exercise of any such right, power, or privilege will
         preclude any other or further exercise of such right, power, or
         privilege or the exercise of any other right, power, or privilege. To
         the maximum extent permitted by applicable law, (a) no claim or right
         arising out of this Agreement can be discharged by one party, in whole
         or in part, by a waiver or renunciation of the claim or right unless in
         writing signed by the other party; (b) no waiver that may be given by a
         party will be applicable except in the specific instance for which it
         is given; and (c) no notice to or demand on one party will be deemed to
         be a waiver of any obligation of such party or of the right of the
         party giving such notice or demand to take further action without
         notice or demand as provided in this Agreement.



                                      -13-
<PAGE>   14





8.2      BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED

         This Agreement shall inure to the benefit of, and shall be binding
         upon, the parties hereto and their respective successors, assigns,
         heirs, and legal representatives, including any entity with which the
         Employer may merge or consolidate or to which all or substantially all
         of its assets may be transferred. The duties and covenants of the
         Employee under this Agreement, being personal, may not be delegated.

8.3      NOTICES

         All notices, consents, waivers, and other communications under this
         Agreement must be in writing and will be deemed to have been duly given
         when (a) delivered by hand (with written confirmation of receipt), (b)
         sent by facsimile (with written confirmation of receipt), provided that
         a copy is mailed by certified mail, return receipt requested, or (c)
         when received by the addressee, if sent by a nationally recognized
         overnight delivery service, in each case to the appropriate addresses
         and facsimile numbers set forth below (or to such other addresses and
         facsimile numbers as a party may designate by notice to the other
         parties):


         If to Employer:

                  Newmark Home Corporation
                  1200 Soldiers Field Drive
                  Sugar Land, TX 77479
                  Facsimile No.:  281/243-0132

         With a copy to:

                  Holly A. Hubenak
                  Technical Olympic USA, Inc.
                  1200 Soldiers Field Drive
                  Sugar Land, TX 77479
                  Facsimile No.: 281/243-0116

         If to the Employee:

                  Lonnie M. Fedrick
                  19 Legend Park Drive
                  Sugar Land, Texas 77479

8.4      ENTIRE AGREEMENT; AMENDMENTS

         Employee and Employer have entered into a Mutual Agreement to Arbitrate
         Claims (the "Arbitration Agreement") incorporated herein for all
         purposes as if set forth in full. The Arbitration Agreement is hereby
         amended to provide that the Arbitration as defined in the Arbitration
         Agreement, shall be non-binding. This Agreement, together with the





                                      -14-
<PAGE>   15

         Arbitration Agreement, contains the entire agreement between the
         parties with respect to the subject matter hereof and supersedes all
         prior agreements and understandings, oral or written, between the
         parties hereto with respect to the subject matter hereof. This
         Agreement may not be amended orally, but only by an agreement in
         writing signed by the parties hereto.

8.5      GOVERNING LAW

         This Agreement will be governed by the laws of the State of Texas
         without regard to conflicts of laws principles.

8.6      SEVERABILITY

         If any provision of this Agreement is held invalid or unenforceable by
         any court of competent jurisdiction, the other provisions of this
         Agreement will remain in full force and effect. Any provision of this
         Agreement held invalid or unenforceable only in part or degree will
         remain in full force and effect to the extent not held invalid or
         unenforceable.






                                      -15-
<PAGE>   16





         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.

                                           "EMPLOYER"

                                           NEWMARK HOME CORPORATION

                                           /s/ Constantine Stengos
                                           By: Newmark Homes Corp. (its sole
                                           shareholder)
                                           Name: Constantine Stengos
                                           Title: Chairman of the Board of
                                           Directors




                                           "EMPLOYEE"


                                           /s/ Lonnie M. Fedrick
                                           LONNIE M. FEDRICK



                                      -16-