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                                                                   EXHIBIT 10.22

                 WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

             1995 NON-EMPLOYEE DIRECTORS' FEE AND STOCK OPTION PLAN
                      (AS AMENDED THROUGH JANUARY 24, 2000)

                  The purposes of the 1995 Non-Employee Directors' Fee and Stock
Option Plan (as amended, the "Plan") are to provide for each director of
Westinghouse Air Brake Technologies Corporation (the "Company") who is not also
an employee of the Company or any of its subsidiaries (a "non-employee
Director") the payment of all or a portion of the retainer fees for future
services to be performed by such non-employee Director ("Director Fees") as a
member of the Board of Directors of the Company (the "Board") in shares of
Common Stock of the Company. The purposes of the Plan are further to promote the
long-term success of the Company by creating a long-term mutuality of interests
between the non-employee Directors and stockholders of the Company, to provide
an additional inducement for such non-employee Directors to remain with the
Company and to provide a means through which the Company may attract able
persons to serve as Directors of the Company.

                                    SECTION 1

                                 ADMINISTRATION

                  The Plan shall be administered by a Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
and consisting of not less than two members of the Board, each of whom at the
time of appointment to the Committee and at all times during service as a member
of the Committee shall be "Non-Employee Directors" as then defined under Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
any successor Rule. The Committee shall keep records of action taken at its
meetings. A majority of the Committee shall constitute a quorum at any meeting,
and the acts of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by all the members of the
Committee, shall be the acts of the Committee.

                  The Committee shall interpret the Plan and prescribe such
rules, regulations and procedures in connection with the operations of the Plan
as it shall deem to be necessary and advisable for the administration of the
Plan consistent with the purposes of the Plan. All questions of interpretation
and application of the Plan, or as to stock issued or delivered or stock options
granted under the Plan, shall be subject to the determination of the Committee,
which shall be final and binding.

                  Notwithstanding the above, the selection of the Directors to
whom stock may be issued or delivered for Director Fees or to whom stock options
are to be granted, the timing of such issuance or delivery or grants, the number
of shares subject to any issuance or delivery or stock option, the exercise
price of any stock option, the vesting or forfeiture of any stock option, the
periods during which any stock option may be

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exercised and the term of any stock option shall be as hereinafter provided, and
the Committee shall have no discretion as to such matters.

                                    SECTION 2

                         SHARES AVAILABLE UNDER THE PLAN

                  The aggregate number of shares which may be issued or
delivered and as to which grants of stock options may be made under the Plan is
500,000 shares of the Common Stock, par value $.01 per share, of the Company
(the "Common Stock"), subject to adjustment and substitution as set forth in
Section 6. If any stock option granted under the Plan is canceled by mutual
consent, is forfeited or terminates or expires for any reason without having
been exercised in full, the number of shares subject thereto shall again be
available for purposes of the Plan. The shares which may be issued or delivered
under the Plan may be either authorized but unissued shares or reacquired shares
or partly each, as shall be determined from time to time by the Board. If the
number of shares then remaining available, either for the payment of Directors
Fees through the use of shares as described in Section 3 below or for the grant
of stock options as described in Section 4 below, is not sufficient for each
non-employee Director entitled to receive the same to be issued or delivered the
number of shares or to be granted an option for the number of shares, as the
case may be, to which such non-employee Director is entitled (or the number of
adjusted or substituted shares pursuant to Section 6), then each non-employee
Director shall be issued or delivered a number of whole shares or granted an
option for a number of whole shares, as the case may be, equal to the number of
shares then remaining times a percentage obtained by dividing the number of
shares or option shares to which such non-employee Director is entitled by the
total number of shares or option shares to be granted to all non-employee
Directors at such time, disregarding any fractions of a share.

                                    SECTION 3

                            PAYMENT OF DIRECTOR FEES

                  Each non-employee Director shall automatically and without
further action by the Board or the Committee receive payment of Director Fees by
the issuance or delivery to the non-employee Director of 1,000 shares of Common
Stock, payable (i) on the first business day following the initial election of
such non-employee Director to the Board after the date of adoption of this Plan
by the Board, unless such first election occurs at an annual meeting of the
Company or within three months prior to the anniversary date of the prior year's
annual meeting, in which case payment of such Director Fees shall only occur
under subsection (ii) as hereinafter set forth and (iii) on the first business
day following the annual meeting of the stockholders of the Company to the
non-employee Directors as of that date.

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                                    SECTION 4

                             GRANT OF STOCK OPTIONS

                  (a) On January 24, 2000, the date of the amendment to and
restatement of this Plan by the Board, each non-employee Director as of that
date shall automatically and without further action by the Board or the
Committee be granted (subject to the vesting provisions set forth in the next
succeeding sentence) a "nonstatutory stock option" (i.e., a stock option which
does not qualify under Sections 422 or 423 of the Internal Revenue Code of 1986
(the "Code")) to purchase 5,000 shares of Common Stock, subject to adjustment
and substitution as set forth in Section 6. Except as otherwise set forth in
section 5(E), the stock options granted under this Section 4(a) shall vest and
become exercisable as follows:

                  (i)      options with respect to 1,666 shares shall vest on
                           the first anniversary of the date of grant;

                  (ii)     options with respect to 1,667 shares shall vest on
                           the second anniversary of the date of grant; and

                  (iii)    options with respect to the final 1,667 shares shall
                           vest on the third anniversary of the date of grant.

                  (b) On the date of his or her first election to the Board
after January 24, 2000, each non-employee director shall automatically and
without further action by the Board or the Committee be granted a nonstatutory
stock option to purchase 5,000 shares of Common Stock, subject to adjustment and
substitution as set forth in Section 6. Except as otherwise set forth in section
5(E), the stock options granted under this Section 4(b) shall vest and become
exercisable as follows:

                  (i)      options with respect to 1,666 shares shall vest on
                           the first anniversary of the date of grant;

                  (ii)     options with respect to 1,667 shares shall vest on
                           the second anniversary of the date of grant; and

                  (iii)    options with respect to the final 1,667 shares shall
                           vest on the third anniversary of the date of grant.

                  (c) On the first business day of each calendar year each
non-employee Director as of that date shall automatically and without further
action by the Board or the Committee be granted a nonstatutory stock option to
purchase 2,000 shares of Common Stock, subject to adjustment and substitution as
set forth in Section 6. This new Section 4(c) shall replace in its entirety the
previous right of Directors to receive option grants to purchase 5,000 shares
every three years.

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                                    SECTION 5

                      TERMS AND CONDITIONS OF STOCK OPTIONS

                  Stock options granted under the Plan shall be subject to the
following terms and conditions:

                  (A) The purchase price at which each stock option may be
         exercised (the "option price") shall be one hundred percent (100%) of
         the fair market value per share of the Common Stock on the date of the
         grant of such stock option pursuant to the Plan, determined as provided
         in Section 5(G); provided, however, that for any stock option granted
         under the Plan on or prior to October 31, 1998, the option price shall
         be the greater of the aforesaid amount or $14.00 per share.

                  (B) The option price for each stock option shall be paid in
         full upon exercise and shall be payable in cash in United States
         dollars (including check, bank draft or money order), which may include
         cash forwarded through a broker or other agent-sponsored exercise or
         financing program; provided, however, that in lieu of such cash the
         person exercising the stock option may pay the option price in whole or
         in part by delivering to the Company shares of the Common Stock having
         a fair market value on the date of exercise of the stock option,
         determined as provided in Section 5(G), equal to the option price for
         the shares being purchased; except that (i) any portion of the option
         price representing a fraction of a share shall in any event be paid in
         cash and (ii) no shares of the Common Stock which have been held for
         less than six months may be delivered in payment of the option price of
         a stock option. If the person exercising a stock option participates in
         a broker or other agent-sponsored exercise or financing program, the
         Company will cooperate with all reasonable procedures of the broker or
         other agent to permit participation by the person exercising the stock
         option in the exercise or financing program. Notwithstanding any
         procedure of the broker or other agent-sponsored exercise or financing
         program, if the option price is paid in cash, the exercise of the stock
         option shall not be deemed to occur and no shares of the Common Stock
         will be issued or delivered until the Company has received full payment
         in cash (including check, bank draft or money order) for the option
         price from the broker or other agent. The date of exercise of a stock
         option shall be determined under procedures established by the
         Committee, and as of the date of exercise the person exercising the
         stock option shall be considered for all purposes to be the owner of
         the shares with respect to which the stock option has been exercised.
         Payment of the option price with shares shall not increase the number
         of shares of the Common Stock which may be issued or delivered under
         the Plan as provided in Section 2.

                  (C) Subject to the terms of Section 5(E) providing for earlier
         or later termination of a stock option, no stock option shall be
         exercisable after the expiration of ten years from the date of grant. A
         stock option to the extent exercisable at any time may be exercised in
         whole or in part.

                  (D) No stock option shall be transferable by the grantee
         otherwise than by Will or, if the grantee dies intestate, by the laws
         of descent and distribution of the state of domicile of the grantee at
         the time of death. All stock options shall be exercisable during the
         lifetime of the grantee only by the grantee or the grantee's guardian
         or legal representative.

                  (E) If a grantee ceases to be a Director of the Company, any
         outstanding stock options held by the grantee shall vest and be
         exercisable and shall terminate, according to the following provisions:

                           (i) If a grantee ceases to be a non-employee Director
                  of the Company because he is removed without cause or because
                  his term lapses and he is not re-nominated for a new term, any
                  then outstanding stock option held by such grantee shall vest
                  and become exercisable in

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                  accordance with the normal vesting schedule (including vesting
                  upon grant of an option) applicable to such option and shall
                  remain exercisable until the expiration date of such stock
                  option;

                           (ii) If during his term of office as a non-employee
                  Director a grantee is removed from office for cause, any then
                  outstanding stock option held by such grantee shall be
                  exercisable by the grantee (but only to the extent that such
                  stock option is vested and exercisable by the grantee
                  immediately prior to ceasing to be a non-employee Director) at
                  any time prior to the expiration date of such stock option or
                  within 90 days after the date of removal, whichever is the
                  shorter period;

                           (iii) Following the death of a grantee whether during
                  service as a non-employee Director of the Company or
                  thereafter, any outstanding stock option held by the grantee
                  at the time of death (whether or not vested and exercisable by
                  the grantee immediately prior to death) shall vest and be
                  exercisable by the person entitled to do so under the Will of
                  the grantee, or, if the grantee shall fail to make
                  testamentary disposition of the stock option or shall die
                  intestate, by the legal representative of the grantee at any
                  time prior to the expiration date of such stock option or
                  within one year after the date of death, whichever is the
                  longer period; and

                           (iv) If during his or her term of office as a
                  non-employee Director a grantee resigns from the Board during
                  his or her term or is nominated for re-election to the Board
                  but fails to win such re-election, any then outstanding stock
                  option held by such grantee shall be exercisable by the
                  grantee (but only to the extent that such stock option is
                  vested and exercisable by the grantee immediately prior to
                  ceasing to be a non-employee Director) at any time prior to
                  the expiration date of such stock option.

                  (F) All stock options shall be confirmed by an agreement, or
         an amendment thereto, which shall be executed on behalf of the Company
         by the Chief Executive Officer (if other than the President), the
         President or any Vice President and by the grantee.

                  (G) Fair market value of the Common Stock shall be the mean
         between the following prices, as applicable, for the date as of which
         fair market value is to be determined as quoted in The Wall Street
         Journal (or in such other reliable publication as the Committee, in its
         discretion, may determine to rely upon): (a) if the Common Stock is
         listed on the New York Stock Exchange, the highest and lowest sales
         prices per share of the Common Stock as quoted in the NYSE-Composite
         Transactions listing for such date, (b) if the Common Stock is not
         listed on such exchange, the highest and lowest sales prices per share
         of Common Stock for such date on (or on any composite index including)
         the principal United States securities exchange registered under the
         Securities Exchange Act of 1934 (the "1934 Act") on which the Common
         Stock is listed, or (c) if the Common Stock is not listed on any such
         exchange, the highest and lowest sales prices per share of the Common
         Stock for such date on the National Association of Securities Dealers
         Automated Quotations System or any successor system then in use
         ("NASDAQ"). If there are no such sale price quotations for the date as
         of which fair market value is to be determined but there are such sale
         price quotations within a reasonable period both before and after such
         date, then fair market value shall be determined by taking a weighted
         average of the means between the highest and lowest sales prices per
         share of the Common Stock as so quoted on the nearest date before and
         the nearest date after the date as of which fair market value is to be
         determined. The average should be weighted inversely by the respective
         numbers of trading days between the selling dates and the date as of

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         which fair market value is to be determined. If there are no such sale
         price quotations on or within a reasonable period both before and after
         the date as of which fair market value is to be determined, then fair
         market value of the Common Stock shall be the mean between the bona
         fide bid and asked prices per share of Common Stock as so quoted for
         such date on NASDAQ, or if none, the weighted average of the means
         between such bona fide bid and asked prices on the nearest trading date
         before and the nearest trading date after the date as of which fair
         market value is to be determined, if both such dates are within a
         reasonable period. The average is to be determined in the manner
         described above in this Section 5(G). If the fair market value of the
         Common Stock cannot be determined on the basis previously set forth in
         this Section 5(G) for the date as of which fair market value is to be
         determined, the Committee shall in good faith determine the fair market
         value of the Common Stock on such date. Fair market value shall be
         determined without regard to any restriction other than a restriction
         which, by its terms, will never lapse.

                  (H) The obligation of the Company to issue or deliver shares
         of the Common Stock under the Plan shall be subject to (i) the
         effectiveness of a registration statement under the Securities Act of
         1933, as amended, with respect to such shares, if deemed necessary or
         appropriate by counsel for the Company, (ii) the condition that the
         shares shall have been listed (or authorized for listing upon official
         notice of issuance) upon each stock exchange, if any, on which the
         Common Stock shares may then be listed and (iii) all other applicable
         laws, regulations, rules and orders which may then be in effect.

                  Subject to the foregoing provisions of this Section 5 and the
other provisions of the Plan, any stock option granted under the Plan may be
subject to such restrictions and other terms and conditions, if any, as shall be
determined, in its discretion, by the Committee and set forth in the agreement
referred to in Section 5(F), or an amendment thereto.

                                    SECTION 6

                      ADJUSTMENT AND SUBSTITUTION OF SHARES

                  If a dividend or other distribution payable in shares of the
Common Stock shall be declared upon the Common Stock, each number of shares of
the Common Stock set forth in Sections 3 and 4, the number of shares of the
Common Stock then subject to any outstanding stock options and the number of
shares of the Common Stock which may be issued or delivered under the Plan but
are not then subject to outstanding stock options shall be adjusted by adding
thereto the number of shares of the Common Stock which would have been
distributable thereon if such shares had been outstanding on the date fixed for
determining the stockholders entitled to receive such stock dividend or
distribution.

                  If the outstanding shares of the Common Stock shall be changed
into or exchangeable for a different number or kind of shares of stock or other
securities of the Company or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of the Common Stock set forth in Sections 3 and 4, for each share of the
Common Stock subject to any then outstanding stock option, and for each share of
the Common Stock which may be issued or delivered under the Plan but which is
not then subject to any outstanding stock option, the number and kind of shares
of stock or other securities into which each outstanding share of the Common
Stock shall be so changed or for which each such share shall be exchangeable.

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                  In case of any adjustment or substitution as provided for in
this Section 6, the aggregate option price for all shares subject to each then
outstanding stock option prior to such adjustment or substitution shall be the
aggregate option price for all shares of stock or other securities (including
any fraction) to which such shares shall have been adjusted or which shall have
been substituted for such shares. Any new option price per share shall be
carried to at least three decimal places with the last decimal place rounded
upwards to the nearest whole number.

                  If the outstanding shares of Common Stock shall be changed in
value by reason of spin-off, split-off, or dividend in partial liquidation,
dividend in property other than cash or extraordinary distribution to holders of
the Common Stock, the Committee shall make any adjustments to any then
outstanding stock option which it determines are equitably required to prevent
dilution or enlargement of the rights of grantees which would otherwise result
from any such transaction.

                  No adjustment or substitution provided for in this Section 6
shall require the Company to issue or deliver or sell a fraction of a share or
other security. Accordingly, all fractional shares or other securities which
result from any such adjustment or substitution shall be eliminated and not
carried forward to any subsequent adjustment or substitution.

                  Except as provided in this Section 6, a grantee shall have no
rights by reason of any issue or delivery by the Company of stock of any class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividends or any other increase or decrease in the number of shares of stock of
any class.

                                   SECTION 7

          EFFECT OF THE PLAN ON THE RIGHTS OF COMPANY AND STOCKHOLDERS

                  Nothing in the Plan, in any Director Fees paid or stock option
granted under the Plan, or in any stock option agreement shall confer any right
to any person to continue as a Director of the Company or interfere in any way
with the rights of the stockholders of the Company or the Board of Directors to
elect and remove Directors.

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                                    SECTION 8

                            AMENDMENT AND TERMINATION

                  The right to amend the Plan at any time and from time to time
and the right to terminate the Plan at any time are hereby specifically reserved
to the Board; provided always that no such termination shall terminate any
outstanding stock options granted under the Plan; and provided further that no
amendment of the Plan shall (a) be made without stockholder approval if
stockholder approval of the amendment is at the time required for stock issued
or delivered for Director Fees or stock options under the Plan to qualify for
the exemption from Section 16(b) of the 1934 Act provided by Rule 16b-3 or by
the rules of the New York Stock Exchange or any other stock exchange on which
the Common Stock may then be listed, (b) amend more than once every six months
the provisions of the Plan relating to the selection of the Directors to whom
stock may be issued or delivered for Directors Fees or to whom stock options are
to be granted, the timing of such issuance or delivery or grants, the number of
shares subject to any issuance or delivery or stock option, the exercise price
of any stock option, the periods during which any stock option may be exercised
and the term of any stock option other than to comport with changes in the Code
or the rules and regulations thereunder or (c) otherwise amend the Plan in any
manner that would cause stock issued or delivered for Director Fees or stock
options under the Plan not to qualify for the exemption provided by Rule 16b-3.
No amendment or termination of the Plan shall, without the written consent of
the holder of a stock option theretofore awarded under the Plan, adversely
affect the rights of such holder with respect thereto.

                  Notwithstanding anything contained in the preceding paragraph
or any other provision of the Plan or any stock option agreement, the Board
shall have the power to amend the Plan in any manner deemed necessary or
advisable for stock issued or delivered for Director Fees or stock options
granted under the Plan to qualify for the exemption provided by Rule 16b-3 (or
any successor rule relating to exemption from Section 16(b) of the 1934 Act),
and any such amendment shall, to the extent deemed necessary or advisable by the
Board, be applicable to any outstanding stock options theretofore granted under
the Plan notwithstanding any contrary provisions contained in any stock option
agreement. In the event of any such amendment to the Plan, the holder of any
stock option outstanding under the Plan shall, upon request of the Committee and
as a condition to the exercisability of such option, execute a conforming
amendment in the form prescribed by the Committee to the stock option agreement
referred to in Section 5(F) within such reasonable time as the Committee shall
specify in such request.

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                                   SECTION 9

                                  INTEGRATION

                  The Plan and any written agreements executed by the
non-employee Directors and the Company contain all of the understandings and
representations between the parties and supersede any prior understandings and
agreements entered into between them regarding the subject matter within. There
are no representations, agreements, arrangements or understandings, oral or
written, between the parties relating to the subject matter within which are not
fully expressed in the Plan and the agreements.

                                   SECTION 10

                       EFFECTIVE DATE AND DURATION OF PLAN

                  The effective date and date of adoption of the Plan shall be
November 1, 1995, the date of adoption of the Plan by the Board (such adoption
of the Plan by the Board having been approved by the majority of the votes cast
at a meeting of the holders of voting stock of the Company) and the effective
date of the amendments to the Plan adopted by the Board on January 24, 2000
shall be January 24, 2000. No stock may be issued or delivered for Director Fees
and no stock option may be granted under the Plan subsequent to October 31,
2005.

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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.

                                       3
<PAGE>   4

                                   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,

                                       4
<PAGE>   5

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

                                       5
<PAGE>   6

         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.

                                       6
<PAGE>   7

                                   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

                                       7
<PAGE>   8

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

                                       8
<PAGE>   9

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.

                                       9
<PAGE>   10

                                    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.

                                       10
<PAGE>   11

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

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