Document:

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                                                                   EXHIBIT 10.10

                              EMPLOYMENT AGREEMENT

This Employment Agreement (this "Agreement") is made this 12th day of July 2002,
by and between Technical Olympic USA, Inc., a Delaware corporation (the
"Employer") and Tommy L. McAden (the "Employee").

WHEREAS, the parties desire to enter into this Agreement setting forth the terms
and conditions of the employment relationship of the Employee with the Employer;

NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:

1. DEFINITIONS. For the purposes of this Agreement, terms have the meanings
defined herein or on Exhibit A attached hereto unless the context otherwise
requires.

2. EMPLOYMENT, TERM AND DUTIES.

2.1 EMPLOYMENT TERM. The Employer hereby employs the Employee, and the Employee
hereby accepts employment by the Employer, upon the terms and conditions set
forth herein for an initial period to begin on the Effective Date and end on the
third (3rd) anniversary thereof, unless terminated earlier in accordance with
the provisions of Section 4; provided, that the Employment Period automatically
shall be extended for an additional one (1) year at the end of the initial three
(3) year period and then again after each successive year thereafter unless
either the Employee or the Employer delivers written notice to the other of the
non-extension of the Employment Period at least six (6) months prior to the end
of the initial Employment Period or successive term, as then applicable.

2.2 DUTIES. The Employee will serve as Chief Financial Officer and Vice
President-Finance and Administration of the Employer during the Employment
Period and will have such other duties and responsibilities as are reasonably
consistent with such position as may be assigned or delegated to the Employee
from time to time by the Board of Directors, the Chief Executive Officer of the
Employer, or a senior executive of the Employer identified by the Chief
Executive Officer to the Employee. 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 senior management of the Employer and the Board of
Directors in the advancement of the best interests of the Employer.

Notwithstanding the above, the Employee may engage in the following activities:
(i) serve on such corporate, civic, religious, educational and/or charitable
boards or committees that have been disclosed to, and approved by, the Board of
Directors in writing, (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions without receiving any kind of compensation,
and (iii) manage his personal investments, provided that such investments do not
conflict with the provisions of Section 5 hereof and do not materially interfere
with or conflict with the Employee's duties and responsibilities under this
Agreement. If the Employee is appointed or elected an officer or director of the
Employer or any Affiliate, the Employee will fulfill his duties as such officer
or director without additional compensation; provided that such appointment may
not be made without the Employee's prior consent. Upon termination of his
employment with the Employer, the Employee hereby automatically resigns as of
such date as an

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officer and director of the Employer and each Affiliate of which he is an
officer or director, if any.

2.3 LOCATION. Employee's place of employment hereunder shall be at the
Employer's offices in the greater Ft. Lauderdale, Florida metropolitan area,
unless the Employee consents otherwise in writing; provided, however, that the
Employee shall travel as reasonably necessary to perform his obligations and
duties to the Employer.

3. COMPENSATION AND BENEFITS. The compensation and benefits payable and provided
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 and its Affiliates in all capacities.

3.1 BASE SALARY. The Employee will be paid an initial annual base salary of
$380,000 commencing on January 1, 2002 (with annual increases, the "Base
Salary") (prorated for any partial calendar year) which will be payable in equal
periodic installments according to the Employer's customary payroll practices
for its executives.

Thereafter, Base Salary shall be reviewed no more than twelve (12) months after
the last salary increase awarded to the Employee prior to the Effective Date and
thereafter at least annually and may be increased (but not decreased) at any
time and from time to time; provided, however, that in no event shall such
increases on an annual basis be less than the higher of (i) that percentage by
which the Consumer Price Index for the Ft. Lauderdale, Florida area published by
the United States government (the "Index") as of December 31 of the immediately
preceding calendar year (the "Base Year") exceeds the Index as of the December
31 of the calendar year immediately preceding the Base Year, or (ii) ten percent
(10%).

3.2 BENEFITS. The Employee (and the Employee's spouse and dependents, where
applicable) shall be permitted to participate in such 401(k) plan (or similar
qualified plan) and any welfare benefit plan, program or fringe benefit made
available to, and on the terms at least as favorable to, other similarly
situated employees of the Employer or its subsidiaries, that may be in effect
from time to time, subject to the Employee meeting the eligibility requirements
under the terms of each of those plans (collectively, the "Benefits"). Nothing
herein shall prevent the Employer from modifying or terminating at any time any
employee benefit plan in the Employer's sole discretion, so long as such
modification or termination equally affects all of the Employer's similarly
situated employees.

3.3 ANNUAL BONUS. The Employee shall receive a cash bonus opportunity during the
Employment Period ("Bonus") substantially equivalent to the opportunity set
forth in Exhibit B attached hereto, as the same may be amended from time to time
by the parties.

3.4 BUSINESS EXPENSES. In accordance with the rules and policies that the
Employer may establish from time to time for its executives, the Employer shall
reimburse the Employee for business expenses reasonably incurred by him in the
performance of his duties hereunder. Requests for reimbursement must be
accompanied by appropriate documentation.

3.5 VACATION. The Employee shall be entitled to four (4) weeks vacation per
calendar year (prorated for less than a full year). Unused vacation in excess of
an aggregate of two (2) weeks

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for all prior years shall not be accumulated or carried over from year to year,
and the Employee shall not be entitled to compensation for unused vacation time
except as provided in Section 4.

3.6 CAR ALLOWANCE. During the Employment Period, the Employee shall be paid a
car allowance in the amount of $1,000 per month, plus a monthly average of $500
for actual and reasonable expenses incurred in connection with the maintenance
or operation of Employee's car.

3.7 OFFICE AND SUPPORT STAFF. During the Employment Period, the Employee shall
be entitled to an office or offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, as provided at any time
with respect to other comparable executives of the Employer and its subsidiaries
and/or as reasonably necessary to perform the Employee's duties and obligations
as set forth herein.

3.8 STOCK OPTIONS. The Employer shall use its best efforts to cause the Employee
to receive the stock option grants substantially in the form of the option
grants set forth in Exhibit C attached hereto (the "Options"). The number of
shares subject to the option grants and the minimum exercise price reflected
therein shall be proportionately increased or decreased, as the case may be, to
the extent the number of shares of the Employer outstanding on the Effective
Date is greater or less than 32.2 million shares.

3.9 RELOCATION BENEFITS. The Employer shall pay or reimburse the Employee for
all expenses related to any relocation of the Employee to the Ft. Lauderdale,
Florida metropolitan area or otherwise permitted hereunder. Any payments made to
the Employee pursuant to this Sections 3.9 shall be grossed-up for the effect of
any federal, state or local income or similar taxes that the Employee may be
required to pay as a result of receiving such benefits or payments or having
such benefits imputed to the Employee so that the net value of the foregoing
benefits shall not be diminished by the payment of any federal, state or local
income or similar taxes thereon by the Employee.

4. TERMINATION.

4.1 DEATH; DISABILITY. This Agreement will terminate automatically upon the
death or Disability of the Employee.

4.2 TERMINATION NOTICE. Any other termination of the Employee's employment shall
be by written notice to the other party, indicating the specific termination
provision in this Agreement relied upon, if any, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for the
termination of the Employee's employment under the provision so indicated. The
date of the Employee's termination of employment shall be specified in such
notice; provided, however, that such date may not be earlier than any applicable
cure periods as set forth herein. If a termination is being effected by the
Employee for any reason other than Good Reason, such date shall not be less than
six (6) months from the date the written notice is given to the Employer; if a
termination is being effected by the Employee for Good Reason, such date shall
not be less than three (3) months from the date the written notice is given to
the Employer; whichever termination notice is applicable is referred to herein
as the Required Notice. Failure to provide the Required Notice shall be deemed a
breach of this Agreement by

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the Employee for which the Employee will be liable to the Employer for any
damages caused by such breach.

4.3 TERMINATION PAY. Upon termination of the Employee's employment, the Employer
will be obligated to pay or provide the Employee or the Employee's estate, as
the case may be, only such compensation and Benefits as are provided in this
Section 4.3.

         (a) TERMINATION BY THE EMPLOYER FOR CAUSE; RESIGNATION OF THE EMPLOYEE
WITHOUT GOOD REASON OR REQUIRED NOTICE. If (i) the Employer terminates the
Employee's employment for Cause; (ii) the Employee terminates his employment for
any reason other than Good Reason; or (iii) the Employee terminates his
employment for any reason without the Required Notice, the Employee shall be
entitled to receive the Accrued Obligations from the Employer, payable via wire
transfer to an account designated by the Employee in a lump sum in cash within
thirty (30) Business Days of the date of termination. Except as specifically
provided herein, the Employee shall not be entitled to any other payments or
Benefits pursuant to this Agreement.

         (b) TERMINATION DUE TO DISABILITY. If the Employee's employment is
terminated due to his Disability, the Employee shall be entitled to receive from
the Employer the sum of the following, payable via wire transfer to an account
designated by the Employee or the Employee's legal representative within thirty
(30) Business Days after the date of termination: (i) the Accrued Obligations
and (ii) the Pro Rata Bonus.

         (c) TERMINATION UPON DEATH. If this Agreement is terminated because of
the Employee's death, the Employee's estate shall be entitled to receive from
the Employer the sum of the following, payable via wire transfer to an account
designated by the Employee's legal representative within thirty (30) Business
Days after the date of termination: (i) the Accrued Obligations; (ii) the
Pro-Rata Bonus; and (iii) the Death Benefit.

         (d) TERMINATION BY THE EMPLOYEE DUE TO GOOD REASON OR BY THE EMPLOYER
WITHOUT CAUSE. Subject to the provisions of Section 4.3(e), if the Employee's
employment is terminated by the Employer without Cause or by the Employee for
Good Reason, the Employee shall be entitled to receive from the Employer the
following, payable via wire transfer within thirty (30) Business Days after the
date of termination: (i) the Termination Payment and (ii) if the Employee timely
elects continuation coverage under the Employer's group health plan, an amount
equal to the monthly premium charge for such coverage, for the lesser of the
then remaining term of the Employment Period or the period of such continued
health coverage, at the active employee premium rate for similar coverage.

         (e) CHANGE IN CONTROL. Notwithstanding the foregoing provisions of
Section 4.3(d) hereof, if the Employee's stated reason for terminating his
employment for Good Reason is the occurrence of a Change of Control, then the
lump sum payable to the Employee under Section 4.3(d)(i) hereof shall be the
greater of (i) the Termination Payment, or (ii) the Change of Control Payment.
Any additional amount due to the Employee shall be paid within thirty (30)
Business Days of the date of termination via wire transfer to an account
designated by the Employee to the Employer.

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4.4 RELEASE AND WAIVER. Notwithstanding anything in Section 4.3 to the contrary,
the Employee shall not be entitled to any payment or Benefit pursuant to Section
4.3 unless the Employee has delivered to the Employer an executed form of
general release, in a form reasonably acceptable to the Employer, that releases
the Employer and its Affiliates, and all their respective officers, directors,
employees and agents from any and all of any kind that the Employee may have
arising out of the Employee's employment with the Employer or the termination of
such employment, but excluding any claims arising under this Agreement, and such
release has become irrevocable.

4.5 NO MITIGATION; NO OFFSET. In the event of any termination of the Employee's
employment under this Agreement, the Employee shall be under no obligation to
seek other employment, and there shall be no offset against amounts due under
this Agreement on account of any remuneration attributable to any subsequent
employment that the Employee may obtain. The Employer's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Employer or any Affiliate may
have against the Employee or others.

4.6 CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER.

         (a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Employer to or for the benefit of the Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 4.6) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code or any interest or
penalties are incurred by the Employee with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment" ) in an amount
such that after payment by the Employee of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest or penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 4.6(a), if it shall be
determined that the Employee is entitled to a Gross-Up Payment, but that the
Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that
could be paid to the Employee such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to the Employee
and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

         (b) Subject to the provisions of Section 4.6(c), all determinations
required to be made under this Section 4.6, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
the Employer's independent certified accountant or such other certified public
accounting firm as may be designated by the Employer (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Employer and
the Employee

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within fifteen (15) Business Days of the receipt of notice from the Employee
that there has been a Payment, or such earlier time as is requested by the
Employer. All fees and expenses of the Accounting Firm shall be borne solely by
the Employer. Any Gross-Up Payment, as determined pursuant to this Section 4.6,
shall be paid by the Employer to the Employee within five (5) Business Days of
the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Employer and the Employee. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Employer should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Employer exhausts its remedies pursuant to
Section 4.6(c) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Employer to or for the benefit of the Employee.

         (c) The Employee shall notify the Employer in writing of any claim by
the Internal Revenue Service, that, if successful, would require the payment by
the Employer of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten (10) Business Days after the Employee is
informed in writing of such claim and shall apprise the Employer of the nature
of such claim and the date on which such claim is requested to be paid. The
Employer shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Employer (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Employer notifies the Employee in writing prior to the
expiration of such period that it desires to contest such claim, the Employee
shall:

                  (i) give the Employer any information reasonably requested by
the Employer relating to such claim;

                  (ii) take such action in connection with contesting such claim
as the Employer shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Employer;

                  (iii) cooperate with the Employer in good faith in order
effectively to contest such claim; and

                  (iv) permit the Employer to participate in any proceedings
relating to such claim;

provided, however, that the Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this Section 4.6(c), the Employer shall control all proceedings taken in
connection

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with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Employee to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
determine; provided, however, that if the Employer directs the Employee to pay
such claim and sue for a refund, the Employer shall advance the amount of such
payment to the Employee, on an interest-free basis and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Employer's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

         (d) If, after the receipt by the Employee of an amount advanced by the
Employer pursuant to Section 4.6(c), the Employee becomes entitled to receive
any refund with respect to such claim, the Employee shall (subject to the
Employer's complying with the requirements of Section 4.6(c)) promptly pay to
the Employer the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Employer pursuant to Section 4.6(c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Employer does not notify the Employee in writing
of its intent to contest such denial of refund prior to the expiration of thirty
(30) days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

5. NON-COMPETITION AND NON-INTERFERENCE.

5.1 ACKNOWLEDGMENTS. The Employer acknowledges that it is providing the Employee
with Confidential Information in order for the Employee to perform his duties
under this Agreement. 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 Confidential Information,
goodwill and other business interests of the Employer.

5.2 COVENANTS OF THE EMPLOYEE. The Employee covenants that he will not, directly
or indirectly:

         (a) during the Noncompete Period, without the express prior written
consent of the 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 the Business in (i) any county in any state, or any county contiguous with a
county,

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in which the Employer or any of its Affiliates is conducting Business activities
or has conducted such Business activities during the prior twelve (12) months,
and (ii) any county in which the Employer or any of its Affiliates is conducting
other business; provided, however, that the Employee may purchase or otherwise
acquire for passive investment up to 3% of any class of securities of any 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 his employment with the Employer or its
Affiliates (except for the account of the Employer and its Affiliates) and the
Non-Compete Period, solicit Business of the same or similar type being carried
on by the Employer or its Affiliates, from any person known by the Employee to
be a customer of the Employer or its Affiliates, whether or not the Employee had
personal contact with such person during the Employee's employment with the
Employer;

         (c) whether for the Employee's own account or the account of any other
person and at any time during his employment with the Employer or its Affiliates
and the Non-Compete Period, (i) solicit, employ, or otherwise engage as an
employee, independent contractor, or otherwise, any person who is an employee of
the Employer or an Affiliate, or in any manner induce, or attempt to induce, any
employee of the Employer or its Affiliate to terminate his employment with the
Employer or its Affiliate; or (ii) interfere with the Employer's or its
Affiliate's relationship with any person who at any time during the Employment
Period, was an employee, contractor, supplier, or customer of the Employer or
its Affiliate; or

         (d) at any time after the termination of his employment, disparage the
Employer or its Affiliates or any shareholders, directors, officers, employees,
or agents of the Employer or any of its Affiliates, so long as the Employer does
not disparage the Employee;

provided, however, that notwithstanding the foregoing, paragraphs (a) and (b)
above shall not apply if the Employee's employment is terminated pursuant to
Section 4.3(d). 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.
The 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 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. 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.

5.3 COVENANTS OF THE EMPLOYER. The Employer covenants and agrees that, during
the Noncompete Period, the following provisions shall apply:

         (a) If the Employee's employment is terminated by the Employer for
Cause, no compensation shall be payable or benefits provided to the Employee
during the Noncompete Period.

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         (b) If the Employee's employment is terminated for any reason other
than death, Disability, for Cause or by the Employee without having provided the
Required Notice, the Employer shall continue to (i) pay to the Employee during
the Noncompete Period the Base Salary as provided herein as if the Employee
remained employed by the Employer during the Noncompete Period and (ii) provide
all of the Benefits to the Employee (and the Employee's spouse and dependents,
as applicable) that the Employer would have provided pursuant to this Agreement,
as if the Employee remained employed by the Employer during the Noncompete
Period, unless the Employer is prohibited from providing any of such Benefits
pursuant to applicable law.

         (c) Notwithstanding the foregoing provisions of this Section 5.3, the
Employer may pay to the Employee the cash equivalent of any Benefit that the
Employer is otherwise obligated to provide the Employee in lieu of providing
such Benefit.

         (d) Notwithstanding the foregoing provisions of this Section 5.3, the
Employer shall have the right, at any time, to release the Employee from the
covenants contained in this Section 5.2, at which time the Employee's right to
receive and the Employer's obligation to make any payments under this Section
5.3 shall terminate upon the payment by the Employer to the Employee of all
amounts due under this Section 5.3 up to and including the date of such release.

6. NON-DISCLOSURE COVENANT.

6.1 ACKNOWLEDGMENTS BY THE EMPLOYEE. The Employee acknowledges that (a) during
the Employment Period, 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; and (c) the provisions of
this Section 6 are reasonable and necessary to prevent the improper use or
disclosure of Confidential Information.

6.2 COVENANTS OF THE EMPLOYEE. The Employee covenants as follows:

         (a) CONFIDENTIALITY. During and after his employment with the Employer
and its Affiliates, 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 Board of Directors or the Chief Executive
Officer; provided, however, that the parties agree that this Agreement does not
prohibit the disclosure of Confidential Information where applicable law
requires, including, but not limited to, in response of subpoenas and/or orders
of a governmental agency or court of competent jurisdiction. In the event that
the Employee is requested or becomes legally compelled under the terms of a
subpoena or order issued by a court of competent jurisdiction or by a
governmental body to make any disclosure of Confidential Information, the
Employee agrees that he will (i) immediately provide the Employer with written
notice of the existence, terms and circumstances, surrounding such request(s) so
that the Employer may seek an appropriate protective order or other appropriate
remedy, (ii) cooperate with the Employer in its efforts to decline, resist or
narrow such requests and (iii) if disclosure of such Confidential Information is
required in the opinion of counsel, exercise reasonable efforts to obtain an
order

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or other reliable assurance that confidential treatment will be accorded to such
disclosed information.

         (b) TRADE SECRETS. 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, so long as it otherwise meets the definition of
Confidential Information. The Employee hereby waives any requirement that the
Employer submit proof of the economic value of any trade secret or post a bond
or other security.

         (c) REMOVAL. 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 the Employer's
business (collectively, the "Proprietary Items"). All of the Proprietary Items,
whether or not developed by the Employee, are the exclusive property of the
Employer. Upon termination of his employment, or upon the request of the
Employer during the Employment Period, the Employee will return to the Employer
all of the Proprietary Items and Confidential Information 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, including
electronic or otherwise, of any of the Proprietary Items or Confidential
Information.

7. GENERAL PROVISIONS OF SECTION 5 AND 6.

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 Sections 5 and 6 of this Agreement 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 a temporary restraining order and/or
injunctive relief to restrain any breach or threatened breach or otherwise to
specifically enforce any provision of this Agreement. The Employee waives any
requirement for the Employer's securing or posting of any bond in conjunction
with any such remedies. The Employee further agrees to and hereby does submit to
in personam jurisdiction before each and every court for that purpose. 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 or providing Benefits otherwise due
to the Employee under this Agreement.

7.2 COVENANTS OF SECTIONS 5 AND 6 ARE ESSENTIAL AND INDEPENDENT COVENANTS. The
covenants of 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

<PAGE>

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. In addition, the Employee's covenants in Sections 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. Notwithstanding anything in the Agreement to
the contrary, (i) the covenants and agreements of the Employee in Sections 5 and
6 shall survive the termination of the Agreement, except as provided below, and
(ii) the covenants and agreements in Section 5.2 shall be effective as of the
Effective Date.

8. GENERAL PROVISIONS.

8.1 INDEMNIFICATION. The Employer shall indemnify and hold harmless the Employee
to the fullest extent permitted by applicable law against all costs (including
reasonable attorneys' fees and costs), judgments, penalties, fines, amounts paid
in settlements, interest and all other liabilities incurred or paid by the
Employee in connection or in any way associated with the investigation, defense,
prosecution, settlement or appeal of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and to which the Employee was or is a party or is threatened to be
made a party by reason of the fact that the Employee is or was an officer,
employee or agent of the Employer, or any of its subsidiaries or Affiliates,
including any property owner or condominium association that the Employee has
been asked to serve on by the Employer, or by reason of anything done or not
done by the Employee in any such capacity or capacities, provided that the
Employee acted in good faith, and in a manner the Employee reasonably believed
to be in or not opposed to the best interests of the Employer, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The Employer also shall pay any and all expenses
(including attorney's fees) incurred by the Employee as a result of the Employee
being called as a witness in connection with any matter involving the Employer
and/or any of its officers or directors. Nothing herein shall limit or reduce
any rights of indemnification to which the Employee might be entitled under the
organizational documents of the Employer or as allowed by applicable law.
Nothing herein shall prohibit the Employer from advancing to the Employee the
anticipated expenses that the Employee would be indemnified and held harmless by
the Employer to the fullest extent permitted herein.

8.2 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.

<PAGE>

8.3 SUCCESSORS. (a) This Agreement is personal to the Employee and without the
prior written consent of the Employer shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.

            (b) This Agreement shall inure to the benefit of and be binding upon
the Employer and its successors and assigns.

            (c) Unless the Employee terminates this Agreement for Good Reason
due to a Change of Control, the Employer will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Employer to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Employer would be required to perform it if no such succession
had taken place. As used in this Agreement "Employer" shall mean the Employer as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

8.4 NOTICES. All notices, consents, waivers, and other communications required
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, the same day or the next
day, 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):

<Table>
<S>                                              <C>
    If to the Employer:                          With a copy to:

    Technical Olympic USA, Inc.                  Technical Olympic USA, Inc.
    4000 Hollywood Blvd., Suite 500-N            1200 Soldiers Field Drive
    Hollywood, Florida 33021                     Sugar Land, TX 77479
    Attn:  Antonio B. Mon, CEO                   Attn:  Holly Hubenak
    Facsimile No.:  (954) 364-4020               Facsimile No.: (281) 243-0116

    And with a second copy to:

    Technical Olympic USA, Inc.
    20 Solomou Street
    Ana Kalamaki
    Athens 17456 Greece
    Attn:  Yannis Delikanakis
    Facsimile No.:  (3010) 995-5586
</Table>

<PAGE>

<Table>

<S>                                             <C>
    If to the Employee:                          With a copy to:

    Tommy L. McAden                              Fox, Rothschild, O'Brien & Frankel, LLP
    331 Catlin Circle                            760 Constitution Drive
    Highland Village, Texas 75077                Exton, PA  19341
    Facsimile No.:  (972) 317-4515               Attn: Michael S. Harrington, Esq.
                                                 Facsimile No.: (610) 458-7337
</Table>

8.5 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and hereby
expressly terminates, rescinds, replaces and supersedes all prior and
contemporaneous agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof.

8.6 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT WILL BE GOVERNED
BY THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE STATE AND FEDERAL COURTS IN BROWARD COUNTY, FLORIDA, FOR THE PURPOSES OF
ANY PROCEEDING ARISING OUT OF THIS AGREEMENT.

8.7 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.

8.8 TAX WITHHOLDINGS. The Employer shall withhold from all payments hereunder
all applicable taxes that it is required to withhold with respect to payments
and Benefits provided under this Agreement.

8.9 AMENDMENTS AND WAIVERS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Employee and a member of the Board of Directors
authorized by the Board of Directors to execute the same. No waiver by either
party hereto at any time of any breach by the other party hereto of, or in
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

8.10 SURVIVAL. The provisions of Sections 4, 5, 6, 7, and 8 shall survive the
termination of this Agreement.

8.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts,
by original or facsimile signatures, each of which shall constitute an original
and all of which taken together shall constitute one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective for all purposes as of the Effective Date.

TECHNICAL OLYMPIC USA, INC.                          EMPLOYEE

By: /s/ Antonio B. Mon                               /s/ Tommy L. McAden
    ------------------                               -------------------------
Name: Antonio B. Mon                                 Name: Tommy L. McAden
Title: Chief Executive Officer

<PAGE>
                                    EXHIBIT A

                                   DEFINITIONS

"Accrued Obligations" means, at the relevant date, the sum of the following: (i)
the Employee's earned or accrued, but unpaid, Base Salary through the date of
termination of the Employee's employment as provided herein; (ii) any Bonus
earned or accrued and vested, but unpaid (together with accrued interest or
earnings credited thereon); (iii) the economic value of any of the Employee's
accrued, but unused, vacation time; and (iv) any unreimbursed business expenses
incurred by the Employee.

"Affiliate" means a person or entity who or which, (i) with respect to an
entity, directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such entity or (ii) with
respect to the Employee, is a parent, spouse or issue of the Employee, including
persons in an adopted or step relationship.

"Board of Directors" means the board of directors of the Employer.

"Business" means the business of developing land for, and the design and
construction of, and the promotion, marketing and sale of, single-family
residences, townhouses, and condominiums.

"Business Day" shall mean any day other than a Saturday, Sunday or bank holiday
recognized in Ft. Lauderdale, Florida.

"Cause" means:

         (a) an act of fraud, misappropriation or personal dishonesty taken by
the Employee and intended to result in the substantial personal enrichment of
the Employee at the expense of the Employer or an Affiliate, including, but not
limited to, the willful engaging by the Employee in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Employer;

         (b) the material violation by the Employee of a material obligation of
the Employee under this Agreement, including, but not limited to, the willful
and continued failure of the Employee to perform substantially the Employee's
duties with the Employer or one of its Affiliates (other than any such failure
resulting from incapacity due to physical or mental illness) which violation or
failure is not remedied within ten (10) Business Days (or such additional
reasonable period of time if additional time is necessary to remedy) after
receipt of written notice or demand for substantial performance or corrective
action is delivered to the Employee by the Board or the Chief Executive Officer
of the Employer which specifically identifies the manner in which the Board or
the Chief Executive Officer believes that the Employee has not substantially
performed the Employee's duties or violated an obligation under this Agreement;

         (c) the conviction, or plea of nolo contendere, of the Employee for any
felony or any misdemeanor involving moral turpitude; or

<PAGE>

         (d) a material violation of any express direction of the Board of
Directors or the Chief Executive Officer of the Employer or a material violation
of any rule, regulation, policy or plan established by the Board of Directors
from time to time regarding the conduct of the Employer's employees and/or its
business, which violation is not remedied within ten (10) Business Days (or such
additional reasonable period of time if additional time is necessary to remedy)
after receipt of written notice from the Employer of such failure.

"Change of Control" means the occurrence of any of the following events, each of
which shall be determined independently of the others:

         (a) any "Person" (as defined below) becomes a "beneficial owner" (as
such term is used in Rule 13d-3 promulgated under the Exchange Act) of forty
percent (40%) or more of the stock of any member of the Consolidated Group
entitled to vote in the election of directors. For purposes of this Agreement,
the term "Person" is used as such term is used in Sections 13(d) and 14(d) of
the Exchange Act; provided, however that the term shall not include any member
of the Consolidated Group, any trustee or other fiduciary holding securities
under an employee benefit plan of any member of the Consolidated Group, or any
corporation owned, directly or indirectly, by the shareholders of any member of
the Consolidated Group;

         (b) shareholders of any member of the Consolidated Group adopt a plan
of complete or substantial (eighty-five percent (85%) or more) liquidation or an
agreement providing for the distribution of all or substantially all of the
assets of such member;

         (c) any member of the Consolidated Group is party to a merger,
consolidation, other form of business combination or a sale of all or
substantially all (eighty-five percent (85%) or more) of its assets, unless the
business of such member is continued following any such transaction by a
resulting entity (which may be, but need not be, such member) and the
shareholders of such member immediately prior to such transaction (the "Prior
Shareholders") hold, directly or indirectly, at least forty percent (40%) of the
voting power of the resulting entity (there being excluded from the voting power
held by the Prior Shareholders, but not from the total voting power of the
resulting entity, any voting power received by Affiliates of a party to the
transaction (other than such member) in their capacities as shareholders of such
member); provided, however, that a merger or consolidation effected to implement
a recapitalization of such member (or similar transaction) in which no Person
acquires more than thirty percent (30%) of the combined voting power of such
member's then outstanding securities shall not constitute a Change in Control;
or

         (d) any member of the Consolidated Group is a subject of a "Rule 13e-3
transaction" as that term is defined in Exchange Act Rule 13e-3, and the first
purchase has been made pursuant to such transaction.

         Notwithstanding the foregoing, if, immediately after the occurrence of
any event enumerated above, the Continuing Directors control the majority of the
Board of Directors of the Employer (or, in the case of any merger or combination
in which the Employer is not the surviving entity, continue to constitute a
majority of the board of directors of such successor entity), such event shall
not constitute a Change of Control for purposes of this Agreement until such
time as the Continuing Directors no longer constitute a majority of the Board of
Directors

<PAGE>

of the Employer (or the successor entity, if applicable). "Continuing Directors"
for this purpose means the members of the Board of Directors of the Employer on
the Effective Date, provided that any person becoming a member of the Board of
Directors of the Employer subsequent to such date whose election or nomination
for election was supported by a majority of the directors who at the time of the
election or nomination for election comprised the Continuing Directors shall be
considered to be a Continuing Director.

"Change of Control Payment" shall mean the sum of the following amounts: (A) the
Accrued Obligations; (B) two (2) times the sum of the following: (1) the highest
Base Salary that would be payable to the Employee during the Employment Period,
(2) an amount equal to the highest Bonus paid to Employee in any of the prior
three (3) fiscal years by the Employer or any of its Affiliates, and (C) the
fair market value of any Benefits and perquisites (other than health benefits,
if paid to the Employee pursuant to subparagraph (ii) of Section 4.2(d) of this
Agreement) to be provided to the Employee for the then remaining term of the
Employment Period.

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.

"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 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.

Notwithstanding the foregoing, Confidential Information shall not include
information otherwise lawfully known generally by or readily accessible to the
trade or general public other than by the improper disclosure by the Employee.

"Consolidated Group" shall mean (i) the group of companies composed of the
Technical Olympic, Inc. or Employer, and (ii) any successor or surviving company
of any of the foregoing entities.

<PAGE>

"Death Benefit" means an amount equal to the lesser of (i) $2,000,000, or (ii)
two (2) times the sum of the following: (A) the aggregate Base Salary at the
rate in effect at the time of death and (B) the highest Bonus paid to Employee
for any of the prior three (3) fiscal years paid by the Employer or any of its
Affiliates.

"Disability" means, for all purposes of this Agreement, the incapacity of the
Employee, due to injury, illness, disease, or bodily or mental infirmity, to
engage in the performance of substantially all of the usual duties of employment
with the Employer as contemplated by Section 2.2 herein, such Disability to be
determined by the Board of Directors of the Employer upon receipt and in
reliance on competent medical advice from one (1) or more individuals, selected
by the Board, who are qualified to give such professional medical advice. The
Employee must submit to a reasonable number of examinations by the medical
doctor making the determination of Disability, 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 for the purposes of submitting the Employee to the
examinations, and providing the authorization of disclosure required hereunder.

It is expressly understood that the Disability of the Employee for a period of
one hundred twenty (120) calendar days or less in the aggregate during any
period of twelve (12) consecutive months, in the absence of any reasonable
expectation that his Disability will exist for more than such a period of time,
shall not constitute a failure by him to perform his duties hereunder and shall
not be deemed a breach or default and the Employee shall receive full
compensation for any such period of Disability or for any other temporary
illness or incapacity during the term of this Agreement.

"Effective Date" means the date on which the merger of Engle Holdings Corp. and
Newmark Homes Corp. occurs and becomes effective, such date being June 25,2002.

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

"Fiscal Year" means the fiscal year of Employer on the Effective Date or as it
may change from time to time.

"Good Reason" means:

         (a) that without the Employee's prior written consent and in the
absence of Cause, one or more of the following events occurs:

                  (i) any materially adverse change in the Employee's authority,
         duties or responsibilities as set forth in Section 2 or any assignment
         to the Employee of duties and responsibilities materially and
         substantially inconsistent with those normally associated with such
         position;

<PAGE>

                  (ii) the Employer requiring the Employee to be based at any
         office more than fifty (50) miles outside the greater Ft. Lauderdale,
         Florida metropolitan area, excluding travel reasonably required in the
         performance of the Employee's responsibilities;

                  (iii) any purported termination by the Employer of the
         Employee's employment otherwise than as expressly permitted by this
         Agreement;

                  (iv) any failure by the Employer to comply with and satisfy
         Section 8.3(c) of this Agreement;

                  (v) the material violation by the Employer of a material
         obligation of the Employer under this Agreement, which violation or
         failure is not remedied within ten (10) Business Days (or such
         additional reasonable period of time if additional time is necessary to
         remedy) after receipt of written notice or demand for substantial
         performance or corrective action is delivered to the Employer and the
         Chief Executive Officer of the Employer by the Employee which
         specifically identifies the manner in which Employee believes that the
         Employer has not substantially performed the Employer's duties or
         violated an obligation under this Agreement; or

                  (vi) a Change of Control occurs.

         (b) within sixty (60) business days of learning of the occurrence of
any such event, and in the absence of any circumstance that constitutes Cause,
the Employee gives written notice to terminate employment with the Employer to
the Chief Executive Officer of the Employer; provided, however, that the events
set forth in subparagraphs (a)(i, ii, iii, or iv) shall not constitute Good
Reason for purposes of this Agreement unless, within twenty (20) Business Days
of Employee's learning of such event, the Employee gives written notice of the
event to the Employer and the Employer fails to remedy such event within thirty
(30) Business Days (or such additional reasonable period of time if additional
time is necessary to remedy) of receipt of such notice.

"Index" shall mean the Consumer Price Index for the Ft. Lauderdale, Florida area
published by the United States government.

"Noncompete Period" means the period beginning on the Effective Date and ending
on the first anniversary of the Employee's termination of employment with the
Employer.

"Pro Rata Bonus" shall mean a pro rata Bonus for the year in which the
Employee's employment terminates based on the performance of the Employer for
the year during which such termination occurs, or, if performance results are
not available, based on a Bonus equal to the highest Bonus paid to Employee in
any of the prior three (3) fiscal years by the Employer or any of its
Affiliates.

"Termination Payment" shall mean a lump sum payment in cash equal to the sum of
the following: (A) an amount equal to the aggregate Base Salary (as it may be
increased from time to time pursuant to this Agreement) that would have been
payable to the Employee if his employment had continued for the then remaining
term of the Employment Period, (B) the Pro

<PAGE>

Rata Bonus, (C) an amount equal to the aggregate Bonus that would have been
payable to the Employee if his employment had continued for the then remaining
term of the Employment Period (other than the year in which the Employee's
employment terminates), calculated by multiplying the highest Bonus paid to
Employee in the prior three (3) fiscal years by the number of years remaining in
the Employment Period, (D) the Accrued Obligations, and (E) the fair market
value of any Benefits and perquisites (other than health benefits, if paid to
the Employee pursuant to subparagraph (ii) of Section 4.3(d) of this Agreement)
to be provided to the Employee for the then remaining term of the Employment
Period.

<PAGE>

                                    EXHIBIT B

                                  Annual Bonus

<PAGE>

                           TECHNICAL OLYMPIC USA, INC.
                       ANNUAL AND LONG-TERM INCENTIVE PLAN

      ANNUAL CASH INCENTIVE AWARD GRANTS FOR 2002, 2003 AND 2004 AGREEMENT

         AGREEMENT made as of ______________, 2002, between Technical Olympic
USA, Inc., a Delaware corporation (the "Company"), and Tommy L. McAden
("Employee").

         To carry out the purposes of the Technical Olympic USA, Inc. Annual and
Long-Term Incentive Plan (the "Plan"), by affording Employee the opportunity to
earn a bonus with respect to each of the years 2002, 2003 and 2004 (each, a
"Bonus Year"), the Company and Employee hereby agree as follows:

1.       Bonus Grant for 2002. As soon as reasonably practical following the end
         of 2002, provided Employee's employment with the Company has not
         terminated prior to the end of 2002, Employee will be paid a bonus for
         2002 equal to 100% of his Base Salary, as defined in the Employment
         Agreement between Employee and the Company dated _____________, 2002
         (the "Employment Agreement"), for 2002.

2.       Bonus Grants for 2003 and 2004.

a.       Basic Bonus.

                  i.       If the Company's Return on Equity ("ROE") for the
                           applicable Bonus Year is 6% or less, no Basic Bonus
                           shall be payable for such Bonus Year. As used herein,
                           "ROE" means Net Income (as defined below), divided by
                           the average of the shareholders' total equity as of
                           the beginning of the first day of the fiscal year and
                           the end of each month of such fiscal year.

                  ii.      If the Company's ROE for the Bonus Year is in excess
                           of 6%, a Basic Bonus shall be payable as follows: for
                           ROE up to but not in excess of 15%, then, subject to
                           Paragraph D below, Employee shall be paid a Basic
                           Bonus equal to the product of (i) 0.5% and (ii) the
                           Company's Net Income for such Bonus Year in excess of
                           6%, but not in excess of 15%. As used herein, "Net
                           Income" means the Company's net income for the fiscal
                           year excluding extraordinary non-recurring items or
                           items of an unusual nature, the impact of any changes
                           in accounting principles, and the charges for annual
                           cash incentive awards hereunder to all corporate
                           officers and directors.

                  iii.     If the Company's ROE for the Bonus Year is in excess
                           of 15%, then, subject to Paragraph d below, Employee
                           shall be paid an additional Basic Bonus, i.e., in
                           addition to that amount payable under subparagraph
                           (ii) above, equal to the product of (i) .8125% and
                           (ii) the Company's Net Income for such Bonus Year in
                           excess of 15%.

<PAGE>

                  iv.      Subject to Paragraph d below, the Basic Bonus earned
                           shall be paid in cash following the Bonus Year as
                           provided herein.

         b.       Kicker Bonus.

                  i.       If the Company's Net Income for the applicable Bonus
                           Year exceeds the average of the Net Income for the
                           three years immediately preceding the applicable
                           Bonus Year, then, subject to Paragraph d below,
                           Employee shall be paid a Kicker Bonus equal to the
                           product of (i) .375% and (ii) the amount of the Net
                           Income for such Bonus Year in excess of such
                           three-year average Net Income. If the Company has a
                           net loss in any of the three years immediately
                           preceding the applicable Bonus Year, such net loss
                           year(s) shall be treated as a zero in calculating the
                           average Net Income for the applicable three-year
                           period. With respect to Bonus Years 2003 and 2004,
                           the Company's pro forma net income for 2001 shall be
                           used in the calculation of the average of net income
                           over the preceding three years. All other
                           calculations under this Agreement shall be based on
                           the certified audited financial statements of the
                           Company.

                  ii.      Subject to Paragraph d below, the Kicker Bonus earned
                           shall be paid in cash following the Bonus Year as
                           provided herein.

         c.       Additional Bonus Awards for 2003 and 2004.

                  If the Company's ROE for the applicable Bonus Year is 6% or
                  higher, then, subject to Paragraph d below, Employee shall be
                  paid a cash bonus following the end of such Bonus Year of
                  9.375% of Employee's annual rate of Base Salary as in effect
                  at the beginning of the Bonus Year, subject to a reduction in
                  such bonus percentage, in the Committee's sole discretion,
                  based on the level of achievement in the Bonus Year of one or
                  more performance goals to be established by the Compensation
                  Committee prior to the beginning of such Bonus Year; provided,
                  however, the Committee may not reduce the bonus percentage
                  otherwise payable to a lower percentage of Employee's Base
                  Salary than that indicated by the Minimum Bonus Percentage
                  below for the level achieved. Such goals, when established for
                  such a Bonus Year (which may be after the date of this
                  Agreement), shall be attached to this Agreement as Attachment
                  A and shall be made a part hereof.

<Table>
<Caption>

                       Level of                                           Minimum
                      Achievement                                    Bonus Percentage
                      -----------                                    ----------------

<S>                                                                  <C>
                   Maximum (1.5 x Target)                                 9.375%
                   Target                                                  6.25%
                   Threshold (0.5 x Target)                               3.125%
                   Below Threshold                                            0%
</Table>

<PAGE>

                  For results between Maximum and Target and between Target and
                  Threshold, the percentage shall be determined by linear
                  interpolation between the two applicable percentages.

         d.       Annual Bonus Limits.

                  Notwithstanding anything in Paragraphs a, b and c above to the
                  contrary, in no event shall the aggregate amount of the Basic,
                  Kicker and/or Additional Bonus earned for any Bonus Year
                  exceed 200% (the "Maximum Amount") of Employee's Base Salary.
                  Further, if for either Bonus Year the aggregate amount of the
                  bonuses earned under Paragraphs a, b and/or c would exceed
                  150% of Employee's Base Salary, then payment of all such bonus
                  amounts in excess of 150% of Employee's Base Salary (the
                  "Excess Amount"), up to the Maximum Amount, shall be deferred
                  (without interest) and paid or forfeited as follows:

                  i.       One-third of the Excess Amount shall vest on each of
                           the next three anniversaries of the end of the
                           applicable Bonus Year and shall be paid to Employee
                           following each vesting date.

                  ii.      Notwithstanding the foregoing, any Excess Amount
                           shall vest in full upon Employee's death, termination
                           of employment due to Employee's "Disability",
                           termination by the Company other than for "Cause", or
                           Employee's termination for a "Good Reason", or due to
                           non-renewal by the Company or the Employee (as such
                           terms are defined in the Employment Agreement) and
                           shall be paid to Employee or Employee's legal
                           representative within twenty (20) business days of
                           such event.

                  iii.     If Employee's employment with the Company terminates
                           for any reason other than as provided in subparagraph
                           ii above, all Excess Amounts then remaining hereunder
                           shall be immediately forfeited.

3. Calculations and Payments.

All calculations under this Agreement shall be made by an independent accounting
firm selected by the Company. In performing such calculations, appropriate
adjustments shall be made by such accountants for any change in accounting
standards required by the FASB after the beginning of a Bonus Year. No payment
shall be made until the Committee certifies the results of such calculations,
but in no event shall any such certification and payment be made later than
thirty (30) business days following the receipt by the Company of the
calculations from the accounting firm for the applicable Bonus Year.

4. General.

Notwithstanding any other provisions of the Plan or this Agreement to the
contrary, if Employee's employment terminates on or following a Change of
Control (as defined in the Employment Agreement) and such termination occurs
during a Bonus Year, such Bonus Year shall end as of the date of such
termination and no further Bonus Years shall begin after such date.

<PAGE>

Nothing in this Agreement or the Plan shall confer any right on Employee to
continue employment with the Company or its Affiliates nor restrict the Company
or its Affiliates from termination of Employee's employment relationship at any
time.

In the event of a conflict between the terms of this Agreement and the Plan, the
Plan shall be the controlling document. Terms defined in the Plan are used
herein with the same meaning.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer; and Employee has executed this Agreement, all
effective as of the day and year first above written.

                                        TECHNICAL OLYMPIC USA, INC.

                                        By:
                                            ------------------------------------
                                             Name:      Antonio B. Mon
                                             Title:     Chief Executive Officer

                                        EMPLOYEE

                                        ----------------------------------------
                                        Tommy L. McAden

<PAGE>

                                    EXHIBIT C
                                     Options

<PAGE>

                                  STOCK OPTIONS
                           TECHNICAL OLYMPIC USA, INC.
                       ANNUAL AND LONG-TERM INCENTIVE PLAN

                        SIGN ON STOCK OPTION AGREEMENT*

AGREEMENT made as of ___________, 2002, between Technical Olympic USA, Inc., a
Delaware corporation (the "Company"), and Tommy McAden ("Employee").

To carry out the purposes of the Technical Olympic USA, Inc. Annual and
Long-Term Incentive Plan (the "Plan"), by affording Employee the opportunity to
purchase shares of Class A common stock, par value $.01, ("Stock") of the
Company, the Company and Employee hereby agree as follows:

     1.  GRANT OF OPTION. The Company hereby irrevocably grants to Employee the
         right and option ("Option") to purchase all or any part of an aggregate
         of [65,613] shares of Stock on the terms and conditions set forth
         herein and in the Plan, which Plan is incorporated herein by reference
         as a part of this Agreement. In the event of any conflict between the
         terms of this Agreement and the Plan, the Plan shall control.
         Capitalized terms used but not defined in this Agreement shall have the
         meaning attributed to such terms under the Plan, unless the context
         requires otherwise. Exercise of this Option is subject to, and
         contingent upon, the approval of the Plan by the shareholders of the
         Company within twelve (12) months after the date the Plan was adopted
         by the Board of Directors of the Company.

     2.  PURCHASE PRICE. The purchase price per share of Stock purchased
         pursuant to the exercise of this Option shall be Fair Market Value of
         the Stock on the grant date, but not less than $14.87.

     3.  EXERCISE OF OPTION. This Option is immediately and fully vested on the
         date hereof. This Option may be exercised, by written notice to the
         Company at its principal executive office addressed to the attention of
         its Secretary (or such other officer or employee of the Company as the
         Company may designate from time to time), at any time and from time to
         time after the date of grant hereof, subject, however, to the following
         provisions:

         (a)      If Employee's employment with the Company terminates by reason
                  of "Disability" (as defined in the employment agreement
                  between the Company and Employee (the "Employment
                  Agreement")), this Option may be exercised, at any time during
                  the one (1) year period following such termination, by
                  Employee or by Employee's guardian or legal representative (or
                  by Employee's estate or the

--------

* The number of Shares subject to this Option and the minimum purchase price per
share remain subject to adjustment as provided in the Employment Agreement.

<PAGE>

                  person who acquires this Option by will or the laws of descent
                  and distribution or otherwise by reason of the death of
                  Employee if Employee dies during such one (1) year period).

         (b)      If Employee dies while in the employ of the Company,
                  Employee's estate (or the person who acquires this Option by
                  will or the laws of descent and distribution or otherwise by
                  reason of the death of Employee) may exercise this Option at
                  any time during the one (1) year period following the date of
                  Employee's death.

         (c)      If Employee's employment with the Company is terminated by the
                  Company for any reason other than due to a Disability or for
                  "Cause" (as such terms are defined in the Employment
                  Agreement), this Option may be exercised at any time during
                  the one (1) year period following such termination, by
                  Employee or by Employee's guardian or legal representative (or
                  by Employee's estate or the person who acquires this Option by
                  will or the laws of descent and distribution or otherwise by
                  reason of the death of Employee if Employee dies during such
                  one (1) year period).

         (d)      If Employee terminates his employment with the Company for any
                  reason other than a Good Reason, or the Company terminates
                  Employee for Cause, this Option may be exercised, at any time
                  during the ninety (90) day period following such termination,
                  by Employee or by Employee's guardian or legal representative
                  (or by Employee's estate or the person who acquires this
                  Option by will or the laws of descent and distribution or
                  otherwise by reason of the death of Employee if Employee dies
                  during such ninety (90) day period).

         (e)      If Employee's employment is terminated by Employee for Good
                  Reason (as such term is defined in the Employment Agreement),
                  this Option may be exercised, at any time during the one (1)
                  year period following such termination, by Employee or by
                  Employee's estate (or the person who acquires this Option by
                  will or the laws of descent and distribution or otherwise by
                  reason of the death of Employee) if Employee dies during such
                  one (1) year period.

         (f)      If Employee's employment is terminated by non-renewal of the
                  Employment Period of the Employment Agreement by the Company
                  or by the Employee, this Option may be exercised at any time
                  during the one (1) year period following such termination by
                  Employee or by Employee's guardian or legal representative (or
                  by Employee's estate or the person who acquires this Option by
                  will or the laws or descent and distribution or otherwise by
                  reason of the death of Employee if Employee dies during such
                  one (1) year period).

         (g)      Notwithstanding the foregoing, there is no minimum or maximum
                  number of shares of Stock that must be purchased by Employee
                  upon exercise of this Option. Instead, Employee may, at any
                  time and from time to time, purchase any number of shares of
                  Stock that are then vested and exercisable according to the
                  provisions of this Agreement.

<PAGE>

         (h)      Notwithstanding the foregoing, this Option shall not be
                  exercisable in any event after the expiration of ten (10)
                  years from the date of grant hereof.

         The purchase price of the shares of Stock as to which this Option is
         exercised shall be paid in full at the time of exercise (a) in cash
         (including by check acceptable to the Company), (b) if the shares are
         readily tradable on a national securities market or exchange, through a
         "cashless broker exercise" procedure in accordance with a program
         established by the Company, or (c) any combination of the foregoing. No
         fraction of a share shall be issued by the Company upon exercise of an
         Option. Unless and until a certificate or certificates representing
         such shares shall have been issued by the Company to Employee, Employee
         (or the person permitted to exercise this Option in the event of
         Employee's death) shall not be or have any of the rights or privileges
         of a shareholder of the Company with respect to shares acquirable upon
         an exercise of this Option.

     4.  WITHHOLDING OF TAX. To the extent that the exercise of this Option or
         the disposition of shares acquired by exercise of this Option results
         in wages to Employee for federal, state or local tax purposes, Employee
         shall deliver to the Company at the time of such exercise or
         disposition such amount of money, if any, as the Company may require to
         meet its minimum withholding obligations under applicable tax laws or
         regulations. No exercise of this Option shall be effective until
         Employee (or the person entitled to exercise this Option, as
         applicable) has made arrangements approved by the Company to satisfy
         all applicable minimum tax withholding requirements of the Company.

         Employee agrees that the shares which Employee may acquire by
         exercising this Option will not be sold or otherwise disposed of in any
         manner which would constitute a violation of any applicable federal or
         state securities laws. Employee also agrees that (i) the certificates
         representing the shares purchased under this Option may bear such
         legend or legends as the Committee deems appropriate in order to assure
         compliance with applicable securities laws, (ii) the Company may refuse
         to register the transfer of the shares purchased under this Option on
         the stock transfer records of the Company if such proposed transfer
         would in the opinion of counsel satisfactory to the Company constitute
         a violation of any applicable securities law, and (iii) the Company may
         give related instructions to its transfer agent, if any, to stop
         registration of the transfer of the shares purchased under this Option.

     5.  BINDING EFFECT. This Agreement shall be binding upon and inure to the
         benefit of any successors to the Company and all persons lawfully
         claiming under Employee.

     6.  ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
         the parties with regard to the subject matter hereof, and contains all
         the covenants, promises, representations, warranties and agreements
         between the parties with respect to the Option granted hereby. Without
         limiting the scope of the preceding sentence, all prior understandings
         and agreements, if any, among the parties hereto relating to the
         subject matter hereof are hereby null and void and of no further force
         and effect. Any modification of this Agreement shall be effective only
         if it is in writing and signed by both Employee and an authorized
         officer of the Company.

<PAGE>

     7.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
         ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
         CONFLICTS OF LAWS PRINCIPLES THEREOF.

     8.  ADVERSE ACTIONS OR DECISIONS. Notwithstanding any provision of this
         Agreement or the Plan to the contrary, in no event shall the Company
         make any change to the Plan or take any action authorized pursuant to
         the Plan which degrades or adversely affects in any manner the rights
         of the Employee hereunder, unless Employee consents thereto in writing.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and Employee has executed this Agreement, all effective
as of the day and year first above written.

                                             TECHNICAL OLYMPIC USA, INC.

                                             By:
                                                --------------------------------

                                             Name:  Antonio B. Mon

                                             Title: Chief Executive Officer

                                             EMPLOYEE

                                             -----------------------------------
                                             Tommy L. McAden

<PAGE>

                           TECHNICAL OLYMPIC USA, INC.
                       ANNUAL AND LONG-TERM INCENTIVE PLAN

            PERFORMANCE ACCELERATED VESTING STOCK OPTION AGREEMENT*

AGREEMENT made as of ___________, 200__, between Technical Olympic USA, Inc., a
Delaware corporation (the "Company"), and Tommy L. McAden ("Employee").

To carry out the purposes of the Technical Olympic USA, Inc. Annual and
Long-Term Incentive Plan (the "Plan"), by affording Employee the opportunity to
purchase shares of Class A common stock, par value $.01, ("Stock") of the
Company, the Company and Employee hereby agree as follows:

     1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee the
right and option ("Option") to purchase all or any part of an aggregate of
[136,279] shares of Stock, in three separate tranches of [45,426] shares of
Stock ("Tranche I"), [45,426] shares of Stock ("Tranche II"), and [45,427]
shares of Stock ("Tranche III"), on the terms and conditions set forth herein
and in the Plan, which Plan is incorporated herein by reference as a part of
this Agreement. In the event of any conflict between the terms of this Agreement
and the Plan, the Plan shall control. Capitalized terms used but not defined in
this Agreement shall have the meaning attributed to such terms under the Plan,
unless the context requires otherwise. Exercise of this Option is subject to,
and contingent upon, the approval of the Plan by the shareholders of the Company
within twelve (12) months after the date the Plan was adopted by the Board of
Directors of the Company.

     2. PURCHASE PRICE. The purchase price per share of Stock purchased pursuant
to the exercise of this Option shall be Fair Market Value of the Stock on the
grant date, but not less than $14.87.

     3. EXERCISE OF OPTION. This Option shall become fully vested on the seventh
anniversary of the date of grant hereof and may be immediately exercised at any
time and from time to time after the seventh anniversary of the date of grant
hereof, by written notice to the Company at its principal executive office
addressed to the attention of its Secretary (or such other officer or employee
of the Company as the Company may designate from time to time); provided,
however, that a portion or all of this Option may become vested earlier and
become exercisable as provided in Attachment A hereto or as provided below:

         (a)      If Employee's employment with the Company terminates by reason
                  of "Disability" (as defined in the employment agreement
                  between the Company and Employee (the "Employment
                  Agreement")), this Option may be exercised, at any

----------

* The number of Shares subject to this Option and the minimum purchase price per
share remain subject to adjustment as provided in the Employment Agreement.

<PAGE>

                  time during the one (1) year period following such
                  termination, by Employee or by Employee's guardian or legal
                  representative (or by Employee's estate or the person who
                  acquires this Option by will or the laws of descent and
                  distribution or otherwise by reason of the death of Employee
                  if Employee dies during such one-year period), but only as to
                  the vested number of shares of Stock, if any, that Employee
                  was entitled to purchase hereunder as of the date Employee's
                  employment so terminates.

         (b)      If Employee dies while in the employ of the Company,
                  Employee's estate (or the person who acquires this Option by
                  will or the laws of descent and distribution or otherwise by
                  reason of the death of Employee) may exercise this Option at
                  any time during the one (1) year period following the date of
                  Employee's death, but only as to the vested number of shares
                  of Stock, if any, that Employee was entitled to purchase
                  hereunder as of the date of Employee's death.

         (c)      If Employee's employment with the Company is terminated by the
                  Company for any reason other than due to a Disability or for
                  "Cause" (as defined in the Employment Agreement), this Option
                  shall be fully vested and may be exercised, at any time during
                  the one (1) year period following such termination, by
                  Employee or by Employee's guardian or legal representative (or
                  by Employee's estate or the person who acquires this Option by
                  will or the laws of descent and distribution or otherwise by
                  reason of the death of Employee if Employee dies during such
                  period).

         (d)      If Employee terminates his employment with the Company for any
                  reason other than a Good Reason, or the Company terminates
                  Employee for Cause, this Option, to the extent vested on the
                  date of termination, may be exercised, at any time during the
                  ninety (90) day period following such termination, by Employee
                  or by Employee's guardian or legal representative (or by
                  Employee's estate or the person who acquires this Option by
                  will or the laws of descent and distribution or otherwise by
                  reason of the death of Employee if Employee dies during such
                  ninety (90) day period), but in each case only as to the
                  vested number of shares of Stock, if any, that Employee was
                  entitled to purchase hereunder as of the date Employee's
                  employment so terminates.

         (e)      If Employee's employment is terminated by Employee for Good
                  Reason, this Option shall be fully vested and may be
                  exercised, at any time during the one (1) year period
                  following such termination, by Employee or by Employee's
                  estate (or the person who acquires this Option by will or the
                  laws of descent and distribution or otherwise by reason of the
                  death of Employee) if Employee dies during such period.

         (f)      If Employee's employment is terminated for any other reason
                  not otherwise addressed herein prior to the seventh
                  anniversary of the date of grant, this Option, to the extent
                  not already vested, shall become vested as to such remaining
                  part thereof upon the seventh anniversary of the date of grant
                  and such remaining part thereof may be exercised at any time
                  during the one (1) year period following

<PAGE>

                  such seventh year anniversary by Employee or by Employee's
                  guardian or legal representative (or by Employee's estate or
                  the person who acquires this Option by will or the laws or
                  descent and distribution or otherwise by reason of the death
                  of Employee if Employee dies during such period).

         (g)      Notwithstanding the foregoing, there is no minimum or maximum
                  number of shares of Stock that must be purchased by Employee
                  upon exercise of this Option. Instead, Employee may, at any
                  time and from time to time, purchase any number of shares of
                  Stock that are then vested and exercisable according to the
                  provisions of this Agreement.

         (h)      Notwithstanding the foregoing, this Option shall not be
                  exercisable in any event after the expiration of ten (10)
                  years from the date of grant hereof.

The purchase price of the shares of Stock as to which this Option is exercised
shall be paid in full at the time of exercise (a) in cash (including by check
acceptable to the Company), (b) if the shares are readily tradable on a national
securities market or exchange, through a "cashless broker exercise" procedure in
accordance with a program established by the Company, or (c) any combination of
the foregoing. No fraction of a share shall be issued by the Company upon
exercise of an Option. Unless and until a certificate or certificates
representing such shares shall have been issued by the Company to Employee,
Employee (or the person permitted to exercise this Option in the event of
Employee's death) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise of
this Option.

         4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares acquired by exercise of this Option results in
wages to Employee for federal, state or local tax purposes, Employee shall
deliver to the Company at the time of such exercise or disposition such amount
of money, if any, as the Company may require to meet its minimum withholding
obligations under applicable tax laws or regulations. No exercise of this Option
shall be effective until Employee (or the person entitled to exercise this
Option, as applicable) has made arrangements approved by the Company to satisfy
all applicable minimum tax withholding requirements of the Company.

Employee agrees that the shares which Employee may acquire by exercising this
Option will not be sold or otherwise disposed of in any manner which would
constitute a violation of any applicable federal or state securities laws.
Employee also agrees that (i) the certificates representing the shares purchased
under this Option may bear such legend or legends as the Committee deems
appropriate in order to assure compliance with applicable securities laws, (ii)
the Company may refuse to register the transfer of the shares purchased under
this Option on the stock transfer records of the Company if such proposed
transfer would in the opinion of counsel satisfactory to the Company constitute
a violation of any applicable securities law, and (iii) the Company may give
related instructions to its transfer agent, if any, to stop registration of the
transfer of the shares purchased under this Option.

         5. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.

<PAGE>

         6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements between the
parties with respect to the Option granted hereby. Without limiting the scope of
the preceding sentence, all prior understandings and agreements, if any, among
the parties hereto relating to the subject matter hereof are hereby null and
void and of no further force and effect. Any modification of this Agreement
shall be effective only if it is in writing and signed by both Employee and an
authorized officer of the Company.

         7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

         8. ADVERSE ACTIONS OR DECISIONS. Notwithstanding any provisions of this
Agreement or the Plan to the contrary, in no event shall the Company make any
change to the Plan or take any action authorized pursuant to the Plan which
degrades or adversely affects in any manner the rights of Employee hereunder,
unless Employee consents thereto in writing.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and Employee has executed this Agreement, all effective
as of the day and year first above written.

                                        TECHNICAL OLYMPIC USA, INC.

                                        By:
                                           -------------------------------------

                                        Name:  Antonio B. Mon

                                        Title: Chief Executive Officer

                                        EMPLOYEE

                                        ----------------------------------------
                                        Tommy L. McAden

<PAGE>

                                  ATTACHMENT A
                           TECHNICAL OLYMPIC USA, INC.
               PERFORMANCE ACCELERATED VESTING STOCK OPTION GRANT

                          ACCELERATED VESTING CRITERIA

I.       Total Return to Shareholders ("TRS")

         The vesting of an Option Tranche shall become accelerated based on the
         comparison of (i) the TRS (as defined below) of the Company's common
         stock at the end of the Performance Period applicable to such Tranche
         to (ii) the TRS of each of the various common stocks of the Peer Group
         for such Performance Period.

         "TRS" means the appreciation/depreciation in the average price of the
         applicable common stock at the end of the Performance Period, with any
         dividends paid on such stock during such Performance Period being
         deemed reinvested, over the average price of the applicable common
         stock at the beginning of the Performance Period.

         The "average price" of the Company's common stock and of the common
         stock of each of the members of the Peer Group (i) at the beginning of
         the Performance Period shall mean the average of the closing prices of
         such stock during the calendar quarter immediately preceding the
         beginning of such Performance Period and (ii) at the end of the
         Performance Period shall mean the average of the closing prices of such
         stock during the last calendar quarter of such Performance Period.

II.      Performance Periods

         Separate Performance Periods shall apply to each Option Tranche as
         follows:

<Table>
<Caption>

                          Option Tranche                        Performance Period
                          --------------                        ------------------
<S>                                                     <C>

                                 I                      January 1, 2002 - December 31, 2004

                                II                      January 1, 2003 - December 31, 2005

                                III                     January 1, 2004 - December 31, 2006
</Table>

III.     Accelerated Vesting

         The number of shares of Stock with respect to an Option Tranche that
         shall become vested, if any, at the end of the applicable Performance
         Period shall be determined by the percentile ranking of the Company's
         TRS for such Performance Period vs. the TRS for the Peer Group
         companies for the Performance Period, as follows:

<PAGE>
<Table>
<Caption>
                                                           1         2         3          4          5            6

<S>                                                      <C>       <C>      <C>         <C>       <C>       <C>

        Company TRS Percentile Rank vs.                  <25th     25th     37.5th      50th      62.5th    > or = to 75th
        Peer Group Members' TRS

        Vested Percentage                                 0%        10%       35%        60%        85%         100%

</Table>

         For results between columns 2 and 3, 3 and 4, 4 and 5, and 5 and 6, the
         Vested Percentage earned shall be determined by linear interpolation
         between the two applicable vesting standards.

IV.      Peer Group

         The Peer Group shall consist of the following companies:

                  Beazer Homes USA, Inc.
                  Centex Corporation
                  D.R. Horton, INC.
                  Hovnanian Enterprises, Inc.
                  KB Home (Formerly Kaufman and Broad Home Corporation)
                  Lennar Corporation
                  M.D.C. Holdings, INC.
                  NVR, Inc.
                  Pulte Corporation
                  The Ryland Group, INC.
                  Standard Pacific Corp.
                  Toll Brothers, INC.

         The Company shall engage Compustat (or other similar firm) to annually
         rank the above peer companies for purposes of determining the Company's
         percentile ranking.

V.       Calculations

         All TRS calculations under this Agreement shall be made by an
         independent accounting firm or consulting expert selected by the
         Company. In performing such calculations, appropriate adjustments shall
         be made for any change in accounting standards required by the FASB
         after the beginning of a Performance Period.

<PAGE>

                           TECHNICAL OLYMPIC USA, INC.
                       ANNUAL AND LONG-TERM INCENTIVE PLAN

                        FRONT END STOCK OPTION AGREEMENT*

AGREEMENT made as of ___________, 200__, between Technical Olympic USA, Inc., a
Delaware corporation (the "Company"), and Tommy L. McAden ("Employee").

To carry out the purposes of the Technical Olympic USA, Inc. Annual and
Long-Term Incentive Plan (the "Plan"), by affording Employee the opportunity to
purchase shares of Class A common stock, par value $.01, ("Stock") of the
Company, the Company and Employee hereby agree as follows:

     1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee the
right and option ("Option") to purchase all or any part of an aggregate of
[302,841] shares of Stock on the terms and conditions set forth herein and in
the Plan, which Plan is incorporated herein by reference as a part of this
Agreement. In the event of any conflict between the terms of this Agreement and
the Plan, the Plan shall control. Capitalized terms used but not defined in this
Agreement shall have the meaning attributed to such terms under the Plan, unless
the context requires otherwise. Exercise of this Option is subject to, and
contingent upon, the approval of the Plan by the shareholders of the Company
within twelve (12) months after the date the Plan was adopted by the Board of
Directors of the Company.

     2. PURCHASE PRICE. The purchase price per share of Stock purchased pursuant
to the exercise of this Option shall be as follows: (i) with respect to the
first [100,947] shares of Stock ("Tranche I"), ten percent (10%) higher than the
Fair Market Value of the stock on the grant date but not less than $16.36, (ii)
with respect to the second [100,947] shares of Stock ("Tranche II"), ten percent
(10%) higher than the Tranche I exercise price but not less than $17.99, and
(iii) with respect to the third [100,947] shares of Stock ("Tranche III"), ten
percent (10%) higher than the Tranche II exercise price but not less than
$19.79.

     3. EXERCISE OF OPTION. This Option shall become vested and may be exercised
in accordance with the following schedule, by written notice to the Company at
its principal executive office addressed to the attention of its Secretary (or
such other officer or employee of the Company as the Company may designate from
time to time):

          A.   with respect to Tranche I, at any time and from time to time on
               and after January 1, 2003;

          B.   with respect to Tranche II, at any time and from time to time on
               and after January 1, 2004; and

----------

* The number of Shares subject to this Option and the minimum purchase price per
share remain subject to adjustment as provided in the Employment Agreement.

<PAGE>

          C.   with respect to Tranche III, at any time and from time to time on
               and after January 1, 2005.

Notwithstanding the above schedule, upon the occurrence of the following events,
this Option shall vest and become exercisable as provided below:

                  (a) If Employee's employment with the Company terminates by
         reason of "Disability" (as defined in the employment agreement between
         the Company and Employee (the "Employment Agreement")), this Option may
         be exercised, at any time during the one (1) year period following such
         termination, by Employee or by Employee's guardian or legal
         representative (or by Employee's estate or the person who acquires this
         Option by will or the laws of descent and distribution or otherwise by
         reason of the death of Employee if Employee dies during such one (1)
         year period), but only as to the vested number of shares of Stock, if
         any, that Employee was entitled to purchase hereunder as of the date
         Employee's employment so terminates.

                  (b) If Employee dies while in the employ of the Company,
         Employee's estate (or the person who acquires this Option by will or
         the laws of descent and distribution or otherwise by reason of the
         death of Employee) may exercise this Option at any time during the one
         (1) year period following the date of Employee's death, but only as to
         the vested number of shares of Stock, if any, that Employee was
         entitled to purchase hereunder as of the date of Employee's death.

                  (c) If Employee's employment with the Company is terminated by
         the Company for any reason other than due to a Disability or for
         "Cause" (as defined in the Employment Agreement), this Option shall be
         fully vested and may be exercised, at any time during the one (1) year
         period following such termination, by Employee or by Employee's
         guardian or legal representative (or by Employee's estate or the person
         who acquires this Option by will or the laws of descent and
         distribution or otherwise by reason of the death of Employee if
         Employee dies during such period).

                  (d) If Employee terminates his employment with the Company for
          any reason other than a "Good Reason" (as defined in the Employment
          Agreement), or the Company terminates Employee for Cause, this Option,
          to the extent vested on the date of termination, may be exercised, at
          any time during the ninety (90) day period following such termination,
          by Employee or by Employee's guardian or legal representative (or by
          Employee's estate or the person who acquires this Option by will or
          the laws of descent and distribution or otherwise by reason of the
          death of Employee if Employee dies during such period), but in each
          case only as to the vested number of shares of Stock, if any, that
          Employee was entitled to purchase hereunder as of the date Employee's
          employment so terminates.

                  (e) If Employee's employment is terminated by Employee for
          Good Reason, this Option shall be fully vested and may be exercised,
          at any time during the one (1) year period following such termination,
          by Employee or by Employee's guardian or legal representative (or by
          the Employee's estate or the person who acquires this Option by

<PAGE>

          will or the laws of descent and distribution or otherwise by reason of
          the death of Employee if Employee dies during such period).

                  (f) If Employee's employment is terminated due to the
         non-renewal of the Employment Period of the Employment Agreement by the
         Company or the Employee, this Option shall be fully vested and may be
         exercised, at any time during the one (1) year period following such
         termination, by Employee or by Employee's guardian or legal
         representative (or by Employee's estate or the person who acquires this
         Option by will or the laws or descent and distribution or otherwise by
         reason of the death of Employee if Employee dies during such period).

                    (g) Notwithstanding the foregoing, there is no minimum or
          maximum number of shares of Stock that must be purchased by Employee
          upon exercise of this Option. Instead, Employee may, at any time and
          from time to time, purchase any number of shares of Stock that are
          then vested and exercisable according to the provisions of this
          Agreement.

                    (h) Notwithstanding the foregoing, this Option shall not be
          exercisable in any event after the expiration of ten (10) years from
          the date of grant hereof.

The purchase price of the shares of Stock as to which this Option is exercised
shall be paid in full at the time of exercise (a) in cash (including by check
acceptable to the Company), (b) if the shares are readily tradable on a national
securities market or exchange, through a "cashless broker exercise" procedure in
accordance with a program established by the Company, or (c) any combination of
the foregoing. No fraction of a share shall be issued by the Company upon
exercise of an Option. Unless and until a certificate or certificates
representing such shares shall have been issued by the Company to Employee,
Employee (or the person permitted to exercise this Option in the event of
Employee's death) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise of
this Option.

         4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares acquired by exercise of this Option results in
wages to Employee for federal, state or local tax purposes, Employee shall
deliver to the Company at the time of such exercise or disposition such amount
of money, if any, as the Company may require to meet its minimum withholding
obligations under applicable tax laws or regulations. No exercise of this Option
shall be effective until Employee (or the person entitled to exercise this
Option, as applicable) has made arrangements approved by the Company to satisfy
all applicable minimum tax withholding requirements of the Company.

Employee agrees that the shares which Employee may acquire by exercising this
Option will not be sold or otherwise disposed of in any manner which would
constitute a violation of any applicable federal or state securities laws.
Employee also agrees that (i) the certificates representing the shares purchased
under this Option may bear such legend or legends as the Committee deems
appropriate in order to assure compliance with applicable securities laws, (ii)
the Company may refuse to register the transfer of the shares purchased under
this Option on the stock transfer records of the Company if such proposed
transfer would in the opinion of counsel

<PAGE>

satisfactory to the Company constitute a violation of any applicable securities
law, and (iii) the Company may give related instructions to its transfer agent,
if any, to stop registration of the transfer of the shares purchased under this
Option.

         5. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.

         6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements between the
parties with respect to the Option granted hereby. Without limiting the scope of
the preceding sentence, all prior understandings and agreements, if any, among
the parties hereto relating to the subject matter hereof are hereby null and
void and of no further force and effect. Any modification of this Agreement
shall be effective only if it is in writing and signed by both Employee and an
authorized officer of the Company.

         7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

         8. ADVERSE ACTIONS OR DECISIONS. Notwithstanding any provisions of this
Agreement or the Plan to the contrary, in no event shall the Company make any
change to the Plan or take any action authorized pursuant to the Plan which
degrades or adversely affects in any manner the rights of Employee hereunder,
unless Employee consents thereto in writing.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and Employee has executed this Agreement, all effective
as of the day and year first above written.

                                             TECHNICAL OLYMPIC USA, INC.

                                             By:
                                                -------------------------------

                                             Name:  Antonio B. Mon

                                             Title: Chief Executive Officer

                                             EMPLOYEE

                                             -----------------------------------
                                             Tommy L. McAden<PAGE>

                                                                     Exhibit 4.1

                          SUBSEQUENT TRANSFER AGREEMENT

         THIS SUBSEQUENT TRANSFER AGREEMENT is dated as of August 8, 2002, (as
amended, this "Agreement") among FRANKLIN AUTO TRUST 2002-1, a Delaware business
trust (the "Issuer"), FRANKLIN RECEIVABLES LLC, a Delaware limited liability
company (the "Seller"), FRANKLIN CAPITAL CORPORATION, a Utah corporation (the
"Servicer" or "Franklin Capital"), and FRANKLIN RESOURCES, INC., a Delaware
corporation ("Franklin Resources" or the "Representative"), and is made pursuant
to the Sale and Servicing Agreement referred to below.

                                W I T N E S E T H:

         WHEREAS the Issuer, the Seller, the Servicer and Franklin Resources are
parties to the Sale and Servicing Agreement, dated as of June 1, 2002 (as
amended, modified or supplemented, the "Sale and Servicing Agreement");

         WHEREAS pursuant to the Sale and Servicing Agreement, the Seller wishes
to convey the Subsequent Receivables referred to on Section 2 below to the
Issuer; and

         WHEREAS, the Issuer is willing to accept such conveyance subject to the
terms and conditions hereof.

         NOW, THEREFORE, the Issuer, the Seller and the Servicer hereby agree as
follows:

         SECTION l. Defined Terms. Capitalized terms used herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement unless otherwise
defined herein.

         "Subsequent Cutoff Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, August 1, 2002.

         "Subsequent Transfer Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, August 8, 2002.

         SECTION 2. Schedule of Receivables. Annexed hereto as Schedule A is a
supplement to Schedule A to the Sale and Servicing Agreement listing the
Receivables that constitute the Subsequent Receivables to be conveyed pursuant
to this Agreement on the Subsequent Transfer Date.

         SECTION 3. Conveyance of Subsequent Receivables. In consideration of
the Issuer's delivery to or upon the order of the Seller of $21,236,691.73, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse (except as expressly provided in the Sale and Servicing
Agreement), all right, title and interest of the Seller in and to:

<PAGE>

         (a) the Subsequent Receivables, and all moneys due thereon, on or after
the related Subsequent Cutoff Date;

         (b) an assignment of the security interests in the Financed Vehicles
granted by Obligors pursuant to the Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;

         (c) any proceeds with respect to the Subsequent Receivables from claims
on any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors and any proceeds from the liquidation of such
Subsequent Receivables;

         (d) any proceeds from any Subsequent Receivables repurchased by a
Dealer, pursuant to a Dealer Agreement, as a result of a breach of a
representation or warranty in the related Dealer Agreement;

         (e) all of the Seller's rights under any extended warranty service
contracts on the related Financed Vehicles;

         (f) the related Receivables Files;

         (g) all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the related Subsequent
Purchase Agreement, including the delivery requirements, representations and
warranties and the cure and repurchase obligations of Franklin Capital under
such Subsequent Purchase Agreement; and

         (h) the proceeds of any and all of the foregoing.

         SECTION 4. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Issuer as of the date of this Agreement
and as of the Subsequent Transfer Date that:

                  (a) Organization and Good Standing. The Seller is duly
         organized and validly existing as a Delaware limited liability company
         with power and authority to own its properties and to conduct its
         business as such properties are currently owned and such business is
         presently conducted, and had at all relevant times, and has, the power,
         authority and legal right to acquire and own the Receivables.

                  (b) Due Qualification. The Seller is duly qualified to do
         business as a limited liability company in good standing, and has
         obtained all necessary licenses and approvals in all jurisdictions in
         which the ownership or lease of property, including the Receivables, or
         the conduct of its business shall require such qualifications.

                  (c) Power and Authority of the Seller. The Seller has the
         power and authority to execute and deliver this Agreement and to
         perform its obligations under each of the Basic Documents to which the
         Seller is a party; the Seller has full power and authority to sell and
         assign the property to be sold and assigned to and deposited with the
         Issuer and the Seller has duly authorized such sale and assignment to
         the Issuer by all necessary

<PAGE>

         action; and the execution, delivery and performance of each of the
         Basic Documents to which the Seller is a party has been duly authorized
         by the Seller by all necessary action.

                  (d) Binding Obligation. This Agreement and each of the Basic
         Documents to which the Seller is a party constitute legal, valid and
         binding obligations of the Seller, enforceable in accordance with its
         terms, subject to applicable bankruptcy, insolvency, moratorium,
         fraudulent conveyance, reorganization and similar laws now or hereafter
         in effect relating to creditors' rights generally and subject to
         general principles of equity (whether applied in a proceeding at law or
         in equity).

                  (e) No Violation. The consummation of the transactions
         contemplated by this Agreement and the fulfillment of the terms hereof
         and thereof do not result in any breach of any of the terms and
         provisions of, nor constitute (with or without notice or lapse of time
         or both) a default under, the certificate of formation or limited
         liability company agreement of the Seller, or any indenture, agreement
         or other instrument to which the Seller is a party or by which it is
         bound; nor result in the creation or imposition of any Lien upon any of
         its properties pursuant to the terms of any such indenture, agreement
         or other instrument (other than pursuant to the Basic Documents); nor
         violate any law or, to the best of its knowledge, any order, rule or
         regulation applicable to the Seller of any court or of any federal or
         state regulatory body, administrative agency or other governmental
         instrumentality having jurisdiction over the Seller or its properties.

                  (f) No Proceedings. There are no proceedings or investigations
         pending against the Seller or, to its best knowledge, threatened
         against the Seller, before any court, regulatory body, administrative
         agency or other governmental instrumentality having jurisdiction over
         the Seller or its properties: (i) asserting the invalidity of this
         Agreement or any of the Basic Documents, the Notes or the Certificates,
         (ii) seeking to prevent the issuance of the Notes or the Certificates
         or the consummation of any of the transactions contemplated by this
         Agreement or any of the Basic Documents, (iii) seeking any
         determination or ruling that could reasonably be expected to have a
         material and adverse effect on the performance by the Seller of its
         obligations under, or the validity or enforceability of, the Basic
         Documents, the Notes or the Certificates or (iv) that might adversely
         affect the federal income tax attributes of the Issuer, the Notes or
         the Certificates.

                  (g) Principal Balance. The aggregate Principal Balance of the
         Subsequent Receivables listed on Schedule A annexed hereto, which
         Schedule A shall supplement Schedule A to the Sale and Servicing
         Agreement, and conveyed to the Issuer pursuant to this Agreement and
         the Sale and Servicing Agreement as of the Subsequent Cutoff Date is
         $21,236,691.73.

         SECTION 5. Conditions Precedent. The obligation of the Issuer to
acquire the Receivables hereunder is subject to the satisfaction, on or prior to
the Subsequent Transfer Date, of the following conditions precedent:

         (a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section 3.1
of the

<PAGE>

         Sale and Servicing Agreement shall be true and correct as of the date
         of this Agreement and as of the Subsequent Transfer Date.

                  (b) Sale and Servicing Agreement Conditions. Each of the
         conditions set forth in Section 2.2(b) of the Sale and Servicing
         Agreement shall have been satisfied.

                  (c) Additional Information. The Seller shall have delivered to
         the Issuer such information as was reasonably requested by the Issuer
         and the Security Insurer to satisfy themselves as to (i) the accuracy
         of the representations and warranties set forth in Section 4 of this
         Agreement and in Section 3.1 of the Sale and Servicing Agreement and
         (ii) the satisfaction of the conditions set forth in this Section 5.

         SECTION 6. Ratification of Agreement. As supplemented by this
Agreement, the Sale and Servicing Agreement is in all respects ratified and
confirmed and the Sale and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the same instrument.

         SECTION 7. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.

         SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE
327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

         SECTION 9. Third Party Beneficiary. The Security Insurer is an express
third party beneficiary of this Agreement.

                            [Signature pages follow]

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.

                    FRANKLIN AUTO TRUST 2002-1

                    By:      DEUTSCHE BANK TRUST COMPANY
                             DELAWARE, not in its individual capacity
                             but solely as Owner Trustee on behalf of the Trust,

                             By: /s/ Susan Barstock
                                 ----------------------------------------
                                 Name:  Susan Barstock
                                 Title: Vice President

                    FRANKLIN RECEIVABLES LLC,
                    Seller

                    By:      FRANKLIN CAPITAL CORPORATION,
                             as managing member

                             By: /s/ Harold E. Miller, Jr.
                                 ----------------------------------------
                                 Name:  Harold E. Miller, Jr.
                                 Title: President and CEO

                    FRANKLIN CAPITAL CORPORATION,
                    Servicer,

                    By: /s/ Harold E. Miller, Jr.
                       --------------------------------------------------
                       Name:  Harold E. Miller, Jr.
                       Title: President and CEO

                    FRANKLIN RESOURCES, INC.,
                    Representative,

                    By: /s/ Jennifer J. Bolt
                       -----------------------------------------
                       Name:  Jennifer J. Bolt
                       Title: Vice President

<PAGE>

Acknowledged and Accepted:

THE BANK OF NEW YORK, not
in its individual capacity
but solely as Trustee,

By:/s/ Scott J. Tepper
   ------------------------------------------
         Name:  Scott J. Tepper
         Title: Assistant Vice President

Acknowledged and Accepted:

DEUTSCHE BANK TRUST COMPANY DELAWARE,
not in its individual capacity
but solely as Owner Trustee,

By:/s/ Susan Barstock
   -----------------------------------------
         Name:  Susan Barstock
         Title:  Vice President

Acknowledged and Accepted:

THE BANK OF NEW YORK, not
 in its individual capacity
 but solely as Indenture Collateral
 Agent

By:/s/ Scott J. Tepper
   ------------------------------------------
         Name: Scott J. Tepper
         Title:  Assistant Vice President

Acknowledged and Accepted:

MBIA INSURANCE CORPORATION

By:/s/ Rosemary Kelley
   -----------------------------------------
         Name: Rosemary Kelley
         Title:  Director

<PAGE>

                                                                      Schedule A
                                                to Subsequent Transfer Agreement

                         List of Subsequent Receivables

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