1ST AMENDED CONFIDENTIAL SEPARATION AGREEMENT

 

<PAGE>

                                                                   EXHIBIT 10.29

 

 

 

                FIRST AMENDED CONFIDENTIAL SEPARATION AGREEMENT,

              GENERAL RELEASE AND INDEPENDENT CONTRACTOR AGREEMENT

 

      This First Amended Confidential Separation Agreement, General Release

and Independent Contractor Agreement ("Amended Agreement") is made as of this

10th day of March 2005 by and between, Eric Rome, a resident of the State of

Texas ("Employee") and Technical Olympic USA, Inc., a Delaware corporation (the

"Company"), all of its current and former parents, partnerships, joint ventures,

subsidiaries, related companies, affiliates, and each of them, as well as its

and their trustees, directors, officers, agents, employees, stockholders,

representatives, assignees, and successors, and each of them (collectively, the

"Company").

 

         WHEREAS, Employee and the Company entered into that certain Employment

Agreement of January 1, 2003 (herein the "Employment Agreement"), and the

Employment Agreement is still in current force and effect between the parties;

 

         WHEREAS, Employee and the Company agree to terminate the employment of

the Employee under the Employment Agreement as of March 11, 2005; and, agreed to

provide for a new and independent relationship between the Employee and Company

after March 11, 2005 on the terms and conditions as set forth in that certain

Confidential Separation Agreement and General Release ("Agreement") previously

executed between the Parties;

 

         WHEREAS, Employee (sometimes referred to herein when appropriate as

Independent Contractor) and the Company agree to supersede the Agreement on the

terms provided herein to the extent they are inconsistent with the Agreement;

and, to terminate that certain Project Consulting Agreement with TOUSA Homes,

Inc. dated March 10, 2005; it is

 

            THEREFORE, in consideration of the covenants undertaken by both

parties hereto, Employee and the Company agree as follows:

 

1.       EMPLOYMENT SEPARATION. Employee, currently employed as Executive Vice

         President of the Company's homebuilding entity, will separate from the

         Company effective March 11, 2005 (the "Separation Date"). Employee and

         the Company acknowledge that the parties have agreed to the employment

         termination as of March 11, 2005 as set forth in this Amended

         Agreement, and an electronic announcement of Employee's separation from

         the Company will be distributed by the Company to pertinent employees

         by March 14, 2005, provided that such announcement is approved by

         Employee prior to distribution by the Company. This Amended Agreement

         supersedes the terms of the Agreement to the extent that the revisions

         of the Amended Agreement are inconsistent with the Agreement. The

         Parties agree to terminate and treat as a nullity that certain Project

         Consulting Agreement with TOUSA Homes, Inc. executed previously as of

         March 10, 2005.

 

 

 

/s/ ER      Employee

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

/s/ CO      Company

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

 

                                       1

<PAGE>

 

 

2.       FINAL SALARY AND BONUS PAYMENTS.

 

         a)       On March 15, 2005, the Company shall pay Employee his final

                  payroll check at his then-current base salary, less standard

                  deductions and withholdings, through March 15, 2005.

 

         b)       On March 15, 2005, the Company shall pay Employee the lump sum

                  of $82,500.00, less standard deductions and withholdings.

 

3.       TRANSITION. Employee agrees to work in a diligent manner,

         conscientiously, expediently, and in the best interest of the Company,

         to effect a smooth transition of his job responsibilities to others up

         to and through March 11, 2005.

 

4.       ADDITIONAL CONTRACTUAL PAYMENTS. In consideration for the below

         promises and covenants by Employee, the Company agrees to pay Employee

         Contractual Payments and subsequent Special Payments (collectively

         "Additional Contractual Payments").

 

         a)       CONTRACTUAL PAYMENTS. In consideration for the below recited

                  promises, the Company will pay Employee monthly Contractual

                  Payments in the amount of $38,666.66 (hereafter "Contractual

                  Payments") per month, with such Contractual Payments to

                  commence on March 15, 2005 (monthly payment for March 2005

                  shall be pro rata from March 15, 2005 until March 31, 2005)

                  and to continue through December 31, 2007. The monthly

                  Contractual Payments will be paid to Employee in two (2) equal

                  installment payments on the 1st and 15th days of each month in

                  Travis County, Texas, and shall be subject to standard

                  withholdings. Employee agrees that his entitlement to the

                  Contractual Payments is expressly conditioned on his execution

                  of this Amended Agreement. Unless the Employee revokes the

                  Amended Agreement, which he understands he may do within 7

                  days after signing as set forth in paragraph 12 below, he will

                  be entitled to receive his Contractual Payments commencing

                  seven (7) days following his execution of this Amended

                  Agreement, retroactive to March 15, 2005 with the Contractual

                  Payments continuing until paid in full through December 31,

                  2007.

 

         b)       SPECIAL PAYMENTS. In further consideration for the below

                  promises, Employee shall receive "Special Payments" from the

                  Company in the total lump sum of $1,286,000.00. The Company

                  will pay these Special Payments in four (4) equal installment

                  payments of $321,500.00 each to Employee in Travis County,

                  Texas on the 15th day after the completion of each calendar

                  quarter, commencing 1Q of Y2005. The first installment of

                  $321,500.00 shall be due on April 15, 2005, and the remaining

                  three (3) installment payments will be due on the 15th day of

                  the month following the end of each calendar quarter until the

                  total lump sum of $1,286,000.00 has been paid by the Company

                  to Employee.

 

 

/s/ ER      Employee

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

/s/ CO      Company

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

 

 

 

                                       2

<PAGE>

 

 

 

5.       ADDITIONAL CONSIDERATION.

 

         a)       BENEFITS CONTINUATION. For the duration of this Amended

                  Agreement, Employee and his dependents shall be entitled to

                  elect to continue to participate in the Company's medical,

                  dental and vision insurance plans in accordance with the

                  Company's summary plan document

 

         b)       AUTO/TELEPHONE ALLOWANCE. Employee shall receive a monthly

                  perquisite allowance of $1725.00, to commence March 15, 2005

                  and continuing through December 31, 2007, as payment by the

                  Company for an automobile and telephone allowance to allay

                  Employee's expenses incurred related to the services to be

                  performed by Employee under paragraph 6 herein.

 

         c)       VACATION ALLOWANCE. Employee shall be paid for any accrued,

                  but unused vacation days, through his Separation Date on March

                  15, 2005.

 

6.       INDEPENDENT CONTRACTOR'S OBLIGATIONS; COMPANY'S OBLIGATIONS AFTER MARCH

         11, 2005. In consideration of the mutual agreements of the parties, the

         Company and Independent Contractor agree to the following Independent

         Contractor relationship after March 11, 2005:

 

         a)       COMPANY'S RIGHT OF FIRST REFUSAL. Independent Contractor shall

                  actively seek real property for acquisition in Company's

                  existing homebuilding markets, either as developed lots or to

                  be developed as lots. Independent Contractor shall dedicate

                  such time as is reasonably necessary to satisfy his job as

                  solely determined by Independent Contractor, but he shall

                  spend no less than 500 hours per annum in his overall pursuit

                  even though those hours may not necessarily result, or be

                  allocable, in an effort for the Company. Independent

                  Contractor shall offer the same to the Company and hereby

                  grants to Company the right of first refusal (the "ROFR") to

                  pursue acquisition of said property as follows:

 

                  (i)      Independent Contractor shall provide written notice

                           to Company of the location of the property, the price

                           of the property, and the general terms and conditions

                           for the acquisition of the property ("ROFR Notice").

 

                  (ii)     Within fifteen (15) days of receipt of the ROFR

                           Notice, the Company shall notify Independent

                           Contractor if Company elects to pursue such

                           opportunity. Company's failure to respond or failure

                           to respond timely shall be deemed its election not to

                           exercise its ROFR.

 

                  (iii)    If Company and the seller of the property fail to

                           execute a purchase agreement within 60 days from the

                           ROFR Notice by Independent Contractor to the Company,

                           Independent Contractor shall be free to offer any of

                           said property to a third party.

 

                  (iv)     Company's right to exercise the ROFR shall expressly

                           be subject to Company being in compliance with all

 

 

 

/s/ ER      Employee

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

/s/ CO      Company

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

 

 

 

                                       3

<PAGE>

 

 

                           provisions of this Amended Agreement at all times

                           from the time such ROFR is exercised until the

                           respective transaction is closed.

 

         b)       RIGHT OF FIRST REFUSAL PAYMENTS. With regard to any property

                  to which the Company exercises its ROFR and enters into a

                  purchase agreement as provided in paragraph 6(a) above,

                  whether during or after the term (the "ROFR Property"),

                  Independent Contractor shall be entitled to receive

                  consideration in addition to his monthly Contractual Payments

                  set forth in paragraph 4(a) above (herein "ROFR Payments"), as

                  follows:

 

                  (i)      The Company shall pay to Independent Contractor ROFR

                           Payments equal to three percent (3%) of the base

                           purchase price of each developed lot (or the

                           equivalent thereof, if acreage) paid by the Company

                           to the seller as and when the acquisition of the

                           respective lot or group of lots (or acreage, if

                           applicable) is closed by the Company.

 

                  (ii)     In addition, the parties acknowledge that the Asset

                           Committee of the Company will prepare a proforma (the

                           "Proforma") of the project in which the lots will be

                           acquired and homes will be constructed. Such Proforma

                           shall specify a projected gross profit margin

                           ("PGPM") reflected in a percentage anticipated for

                           the project. The Company shall confirm the same to

                           Independent Contractor by a copy of its approval of

                           the project. If the actual gross profit margin

                           ("AGPM") on completion of a project exceeds the PGPM

                           2.5%, but less than 5.0%, then the Company shall pay

                           to Independent Contractor an ROFR Payment equal to

                           two percent (2%) of the original base purchase price

                           of the lots. If the AGPM on completion of a project

                           exceeds the PGPM by 5%, then the Company shall pay to

                           the Independent Contractor an ROFR Payment equal to

                           three percent (3%) of the original base purchase

                           price of the lots. AS AN EXAMPLE OF THE PAYMENT

                           STRUCTION, IF THE PGPM OF A PROJECT IS 21.4% AND THE

                           AGPM IS 23%, NO ROFR PAYMENT SHALL BE DUE. IF THE

                           PGPM IS 21.4% AND THE AGPM IS 24% THEN INDEPENDENT

                           CONTRACTOR SHALL BE ENTITLED TO AN ROFR PAYMENT OF 2%

                           OF THE ORIGINAL BASE PURCHASE PRICE OF THE LOTS. IF

                           THE PGPM IS 21.4% AND THE AGPM IS 26.8%, THEN

                           INDEPENDENT CONTRACTOR SHALL BE ENTITLED TO AN ROFR

                           PAYMENT OF 3% OF THE ORIGINAL BASE PURCHASE PRICE OF

                           THE LOTS. The ROFR Payment shall be paid within

                           thirty (30) days after the completion of the project

                           within which the lots are located. "Completion" shall

                           mean construction and sale of homes on at least 90%

                           of the lots acquired under each contract or amendment

                           thereto.

 

                  (iii)    The obligation of the Company to make the ROFR

                           Payments hereunder shall survive the termination or

                           expiration of the term of this Amended Agreement.

 

 

/s/ ER      Employee

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

/s/ CO      Company

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

 

 

 

                                       4

<PAGE>

 

 

 

         c)       INDEPENDENT CONTRACTOR'S HOMEBUILDING LIMITATIONS.

 

                  Unless Independent Contractor has received the prior written

                  consent of the Chief Executive Officer or the Board of

                  Directors of the Company, Independent Contractor agree as

                  follows:

 

                  (i)      Independent Contractor agrees that during Y2005,

                           Independent Contractor will not, individually or in

                           connection with any third party business entity,

                           close and fund on more than 20 new construction homes

                           provided that (i) each such home has a total sales

                           price of not more than $375,000.00, and (ii) is

                           located in any current homebuilding market of the

                           Company.

 

                  (ii)     Independent Contractor agrees that during Y2006,

                           Independent Contractor will not, individually or in

                           connection with any third party business entity,

                           close and fund on more than 75 new construction homes

                           provided that (i) each such home has a total sales

                           price of not more than $375,000.00, and (ii) is

                           located in any current homebuilding market of the

                           Company.

 

                  (iii)    Independent Contractor agrees that during Y2007,

                           Independent Contractor will not, individually or in

                           connection with any third party business entity,

                           close and fund on more than 150 new construction

                           homes provided that (i) each such home has a total

                           sales price of not more than $375,000.00, and (ii) is

                           located in any current homebuilding market of the

                           Company.

 

         Provided, however, and notwithstanding the foregoing, if Independent

         Contractor gives the Company 60 days' notice of hi