<PAGE>

Loan No. C-331992



                               PROMISSORY NOTE
                               ---------------


$ 10,000,000.00              Lynnwood, Washington                  April 2, 1997



    For value received, the undersigned, herein called "Borrower," promises to
pay to the order of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin
corporation, who, together with any subsequent holder of this note, is
hereinafter referred to as "Lender", at 720 E. Wisconsin Avenue, Milwaukee, WI
53202 or at such other place as Lender shall designate in writing, in coin or
currency which, at the time or times of payment, is legal tender for public and
private debts in the United States, the principal sum of Ten Million And No/100
Dollars ($10,000,000.00) or so much thereof as shall have been advanced from
time to time plus interest on the outstanding principal balance at the rate and
payable as follows:

    Interest shall accrue from the date of advance until maturity at the rate
of seven and ninety-nine one-hundredths percent (7.99%) per annum (the "Interest
Rate").

    Accrued interest only on the amount advanced shall be paid on the first day
of the month following the date on which the initial advance is made
("Amortization Period Commencement Date").  On the first day of the following
month (the "Initial Amortization Date") and on the first day of each and every
month thereafter, installments of principal and interest shall be paid in an
amount equal to the unpaid principal balance on the Initial Amortization Date
multiplied by 0.012127476.

    After each additional advance, the monthly payment shall be increased to an
amount which is sufficient to amortize the unpaid principal balance at the
interest rate set forth herein during the then remaining portion of a period of
ten years commencing with the Amortization Period Commencement Date.

    All installments shall be applied first in payment of interest, calculated
monthly on the unpaid principal balance, and the remainder of each installment
shall be applied in payment of principal.  The entire unpaid principal balance
plus accrued interest thereon shall be due and payable on May 1, 2007 (the
"Maturity Date").

    Borrower shall have the right, upon thirty (30) days advance written
notice, beginning December 1, 2001 of paying this note in full with a prepayment
fee.  This fee represents consideration to Lender for loss of yield and
reinvestment costs.  The fee shall be the greater of Yield Maintenance or 1.0%
of the outstanding principal balance of this note.

    As used herein, "Yield Maintenance" means the amount, if any, by which

      (i)  the present value of the Then Remaining Payments (as hereinafter
defined) calculated using a periodic discount rate (corresponding to the payment
frequency under this note) which, when compounded for such number of payment
periods in a year, equals the per annum effective yield of the Most Recently
Auctioned United States Treasury Obligation having a


<PAGE>

maturity date equal to the Maturity Date (or, if there is no such equal maturity
date, then the linearly interpolated per annum effective yield of the two Most
Recently Auctioned United States Treasury Obligations having maturity dates most
nearly equivalent to the Maturity Date) as reported by THE WALL STREET JOURNAL
five business days prior to the date of prepayment; exceeds

    (ii) the outstanding principal balance of this note (exclusive of all
accrued interest).

    If such United States Treasury obligation yields shall not be reported as
of such time or the yields reported as of such time shall not be ascertainable,
then the periodic discount rate shall be equal to the Treasury Constant Maturity
Series yields reported, for the latest day for which such yields shall have been
so reported, as of five business days preceding the prepayment date, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded United States Treasury obligations having a constant
maturity most nearly equivalent to the Maturity Date.

    As used herein, "Then Remaining Payments" means payments in such amounts
and at such times as would have been payable subsequent to the date of such
prepayment in accordance with the terms of this note.

    As used herein, "Most Recently Auctioned United States Treasury
Obligations" means the U. S. Treasury bonds, notes and bills with maturities of
30 years, 10 years, 5 years, 3 years, 2 years and 1 year which, as of the date
the prepayment fee is calculated, were most recently auctioned by the United
States Treasury.

    Upon the occurrence of an Event of Default (as defined in the Lien
Instrument) followed by the acceleration of the whole indebtedness evidenced by
this note, or a condemnation or sale under threat of condemnation of all or
substantially all of the Property, the payment of such indebtedness will
constitute an evasion of the prepayment terms hereunder and be deemed to be a
voluntary prepayment hereof and such payment will, therefore, to the extent not
prohibited by law, include the prepayment fee required under the prepayment in
full privilege recited above or, if such prepayment occurs prior to December 1,
2001 and results from an Event of Default followed by an acceleration of the
whole indebtedness, then such payment will, to the extent not prohibited by law,
include a prepayment fee equal to the greater of Yield Maintenance or 6% of the
outstanding principal balance of this note.  If such prepayment occurs prior to
December 1, 2001 and results from a condemnation or sale under threat of
condemnation of all or substantially all of the Property, the prepayment fee
shall be the greater of Yield Maintenance or 2% of the outstanding principal
balance of this note.

    Notwithstanding the above and provided Borrower is not in default under any
provision contained in the Loan Documents (as defined in the Lien Instrument),
this note may be prepaid in full at any time, without a prepayment fee, during
the last 60 days of the term of this note.

    This note is secured by certain property (the "Property") in the City of
Lynnwood, County of Snohomish, State of Washington, described in a Deed of Trust
and Security Agreement (the "Lien Instrument") of even date herewith executed by
Borrower to Washington Administrative Services, Inc., as Trustee for The
Northwestern Mutual Life Insurance Company.


                                         -2-

<PAGE>

    Upon the occurrence of an Event of Default (as defined in the Lien
Instrument), the whole unpaid principal hereof and accrued interest shall, at
the option of Lender, to be exercised at any time thereafter, become due and
payable at once without notice, notice of the exercise of, and the intent to
exercise, such option being hereby expressly waived.

    All parties at any time liable, whether primarily or secondarily, for
payment of indebtedness evidenced hereby, for themselves, their heirs, legal
representatives, successors and assigns, respectively, expressly waive
presentment for payment, notice of dishonor, protest, notice of protest, and
diligence in collection; consent to the extension by Lender of the time of said
payments or any part thereof; further consent that the real or collateral
security or any part thereof may be released by Lender, without in any way
modifying, altering, releasing, affecting, or limiting their respective
liability or the lien of the Lien Instrument; and agree to pay reasonable
attorneys' fees and expenses of collection in case this note is placed in the
hands of an attorney for collection or suit is brought hereon and any attorneys'
fees and expenses incurred by Lender to enforce or preserve its rights under any
of the Loan Documents in any bankruptcy or insolvency proceeding.

    Any principal, interest or other amounts payable under any of the Loan
Documents (as defined in the Lien Instrument), not paid when due (without regard
to any notice and/or cure provisions contained in any of the Loan Documents),
including principal becoming due by reason of acceleration by Lender of the
entire unpaid balance of this note, shall bear interest from the due date
thereof until paid at the Default Rate.  As used herein, "Default Rate" means
the lower of a rate equal to the interest rate in effect at the time of the
default as herein provided plus 5% per annum or the maximum rate permitted by
law.

    No provision of this note shall require the payment or permit the
collection of interest, including any fees paid which are construed under
applicable law to be interest, in excess of the maximum permitted by law.  If
any such excess interest is collected or herein provided for, or shall be
adjudicated to have been collected or be so provided for herein, the provisions
of this paragraph shall govern, and Borrower shall not be obligated to pay the
amount of such interest to the extent that it is in excess of the amount
permitted by law.  Any such excess collected shall, at the option of Lender,
unless otherwise required by applicable law, be immediately refunded to Borrower
or credited on the principal of this note immediately upon Lender's awareness of
the collection of such excess.

    This note shall be governed by and construed in accordance with the laws of
Washington.

    ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, MODIFY
LOAN TERMS, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.


                                         -3-

<PAGE>

    IN WITNESS WHEREOF, this note has been executed by the undersigned as of
the day and year first above written.

                                       EAGLE HARDWARE & GARDEN, INC.,
                                       a Washington corporation

                                       By  /s/ Ronald P. Maccarone
                                          ---------------------------
                                            -------------------------
                                            Its    EVP/CFO
                                                ---------------------


                                         -4-